We all know that the iPhone 5 has been another outstanding success for Apple since it was first set free to consumers back in September. It is only in the last week or so that supplies finally caught up with demand so that it is now in stock if you order online and of course there should be plenty more sales in the short time now until Christmas. However it seems that looking at the overall picture, the iPhone 5 could be outshone by its iPhone 4S predecessor.
This is certainly news that will surprise a lot of people especially when considering the iPhone 5 seems to be still flying off the shelves but the latest research implies that the latest iPhone may not achieve as many sales as the iPhone 4S and that overall interest in Apple’s iconic iPhone line could be waning. Certainly for some time it seemed that anyone who had invested in Apple could be sure that their investment would pay off. However although shares peaked at a high of $705.07 in September they dropped over 25% last month, amid insecurity among Apple investors.
Although shares have bounced back slightly since late last month it seems more glimmerings of panic may be on the way for investors following a new report. One analyst, UBS’s Steve Milunovich, has now dropped Apple’s fiscal year 2013 and 2014 estimates as well as cutting back on Apple shares price targets, down from a previous estimate of $780 to $700. For this fiscal year Milunovich also reduced iPhone sales targets by 5 million units and caused further apprehension by saying that some sources in China “do not expect the iPhone 5 to do as well as the iPhone 4S,” according to BGR.
The same analyst also predicts that production of the iPhone 5 could fall to 25 million units in Q1 next year and this would impact sales for the June quarter. We’ve previously discussed speculation of a new iPhone 5S coming next year that may well come in the summer, reverting to Apple’s customary iPhone release timeframe rather than the fall and of course if this happened then Apple would see a stock boost in the summer instead of having to wait until fall.
It’s rather alarming though that Milunovich has downscaled Apple earnings in fiscal 2013 to $47 per share from a previous $51.50 estimate. For 2014 the analyst now sees Apple earnings at $55.85 per share reduced from $62. The suggestion that the iPhone 4S could outsell the iPhone 5 still seems rather odd at this early stage but it makes sense that demand for any product will eventually plateau and maybe these are early indicators that this is happening to the Apple iPhone.
We’d really like to hear what our readers think about this. Do you think that consumer appeal for the Apple iPhone line has already peaked and is now leveling out? If so what do you think Apple can do to rejuvenate the iPhone? Maybe you feel that it’s too early to tell and will only believe the iPhone could be losing popularity if shares continue to fall and production is cut back as Milunovich forecasts? Let us know with your comments.