Taiwan-based analyst Ming-Chi Kuo said December quarter iPhone sales may have been flattish due to frontloading in January ahead of Trump’s tariffs, and the second quarter may see a decline.
Apple, Inc. ($AAPL) shares had a solid 2024, posting an above-market gain of 31%, primarily on hopes that iPhone sales growth would inflect higher due to the introduction of Apple Intelligent features. However, recent analysts' comments have poured cold water on those hopes.
Taiwan-based TFI Securities analyst Ming-Chi Kuo became the latest to offer a lukewarm outlook for 2025
In a post on Medium on Friday, the analyst said Apple will face more ‘’challenging hurdles” in 2025, including nearly stagnant iPhone growth, a lack of appreciable contribution from artificial intelligence (AI) services and the ongoing weakness in the Chinese market.
Lackluster iPhone Sales
Kuo said Apple has shown caution while discussing iPhone production plans with key suppliers. Notwithstanding the likely launch of the new iPhone SE4 in the first half of fiscal 2025, he expects sales of the company’s flagship device to decline by 6% year-over-year (YoY).
In the fiscal year, first-quarter sales may have been flattish due to frontloading in January ahead of Trump’s tariffs, and the second quarter may see a decline, he added.
China Woes
The Apple analyst noted that the company experienced a 10-12% decline in iPhone shipments in China in December versus the flat shipments of smartphones overall, eroding its market share.
According to the analyst, a China renaissance isn’t likely any time soon, as the ultra-thin iPhone planned for the second half and the foldable phone in the planning stages support only eSIM, which is not currently promoted in China.
He said the ultra-thin iPhone 17 may not significantly kickstart volume, partly due to downgraded components, higher experience, and user experience similar to the current models.
Kuo estimates iPhone shipments of 220 million-225 million units in 2025, compared to 2024’s 220 million units and the consensus of over 240 million.
Negativity Abounds
Kuo’s comments come close on the heels of a cautious outlook issued by a few other analysts. Last week, Barclays, which is bearish on Apple, said it expects a mixed December quarter performance from Apple, citing weaker-than-expected iPhone shipments and increased regulatory risks
At the start of the year, UBS analyst David Vogt reduced his December quarter revenue estimates, also premised on soft iPhone shipments.
Separately, a Consumer Technology Association (CTA) report said smartphone prices could increase by as much $305 if President-elect Donald Trump were to make good on his tariff promise.
In another news, a proxy statement filed by Apple with the SEC on Friday showed that the company has recommended its shareholders vote against shareholders’ proposals, including the ones supporting a report on ethical AI data acquisition and usage and ceasing diversity, equity and inclusion (DEI) programs.
Retail Mood Lifts
Retail sentiment toward Apple stock has improved to ‘bullish’ (56/100) from ‘bearish’ a day ago, although message volume remained anemic at ‘low’ levels.
Apple stock has lost about 5.4% since the start of 2025, as it trades off the all-time high of $260.10 hit on Dec. 26.
A retail watcher of the stock hoped for a revival following the Jan. 20 inauguration day.
Another suggested they were bullish as long as the stock traded above the $237 level.
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