Apple iPhone unit sales could drop by 36% in the second calendar quarter of 2020, according to a note from Goldman Sachs.- The firm downgraded its outlook on Apple to "sell" from "neutral."
- Goldman Sachs also believes Apple's average selling price could dip by 6% year-over-year as consumers may opt for cheaper devices during the
coronavirus pandemic. - Visit Business Insider's homepage for more stories.
Apple could see iPhone unit sales drop by 36% in the second calendar quarter of 2020 as the economy struggles amid the coronavirus pandemic, according to a group of Goldman Sachs analysts led by Rod Hall.
Goldman Sachs says that trajectory could recover to just a 2% decline by the fourth quarter and predicts a similar pattern for Apple's other products. The bank downgraded its outlook on Apple to "sell" on Friday.
The prediction isn't that Apple will lose iPhone current users. Rather, Goldman Sachs sees iPhone owners holding on to their devices for longer periods of time or opting for cheaper devices as the economy suffers.
As such, Goldman Sachs believes that Apple's average selling price for iPhones could decline by 6% year-over-year in the fourth calendar quarter of 2020 and recover by late 2021. Apple also gave shoppers looking for a cheaper iPhone another option to choose from on Wednesday by releasing the iPhone SE, which is significantly less expensive than its flagship line at just $400.
It's not the first time there's been an indication that the coronavirus outbreak could threaten global demand for new iPhones. Apple is reportedly concerned that consumer appetite for iPhone upgrades, particularly 5G-enabled premium models like the ones that are expected to debut in the fall, could be weak, according to Nikkei Asian Review.
The smartphone market is one of many industries that's been suffering as a result of the coronavirus outbreak. Smartphone shipments dropped 38% year-over-year in February 2020 according to Strategy Analytics, making it the biggest fall ever in the history of the market.
Apple said in February that it does not expect to meet its revenue guidance for its fiscal second quarter of 2020, and it did not issue a revised figure. Wall Street will get its first sense of how the coronavirus pandemic has impacted Apple's business when the company reports its fiscal second quarter earnings on April 30.
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