Apple Inc. (AAPL) will sell fewer iPhones than expected in the first half of 2018, according to one team of analysts on the Street, reported CNBC. Goldman Sachs reduced its forecasts for the first two quarters of the year for Apple's iPhone sales, expecting the tech giant to ship 53 million units in the March quarter and 40.3 million units in the three month period ending in June. Previously, the investment firm foresaw the Cupertino, California-based tech titan selling 54.7 million iPhones in Q1 and 43.5 million units in Q2. (See also: Apple Needs to Lower Average Selling Prices: RBC.)
"iPhone demand expectations for March and June are already weak but we believe that early CQ1 (calendar first quarter) demand indications suggest even lower actual numbers than consensus is modeling," wrote the Goldman analysts in a note released Tuesday.
For the full fiscal year ending Sept. 30, 2018, analysts expect Apple's iPhone shipments to number 217.3 million, marking a 2.5% decline from their previous forecast. Goldman also slashed its iPhone shipment projections for fiscal 2019 and 2020 by 4% and 1.8% respectively.
GS: Apple Prices to Recover
Earlier this year, investors sent Apple stock sliding on fears of slowing demand for its smartphones, indicating that its more expensive 10th anniversary smartphone, the iPhone X, was scaring away more budget-conscious consumers, while longer replacement cycles pressured the bottom line. Bulls, on the other hand, highlighted a higher average selling price (ASP) of Apple products as outweighing a slump in demand for the company's hardware. Goldman's ASP forecast for Apple products in the June quarter is now 2% below the Street's average, yet the firm sees prices recovering in FY19 and FY20.
The analysts also reduced their revenue forecasts for the 2018 and 2019 fiscal years by 2.4% and 2.7% respectively, to $256.6 billion and $272.5 billion. While agreeing with many on the Street that replacement cycles are lengthening, the Goldman team indicated that the overall number of people with Apple smartphones will continue to grow from 631 million units currently.
The note comes amid chatter on the Street that Apple is likely to offer at least three new iPhones this year in efforts to segment its market and grow its user base. New devices such as a less expensive version of the iPhone X with a LCD screen instead of OLED technology, should help ASPs recover within the next few years, wrote Goldman. (See also: Apple Working on Foldable iPhone for 2020: BofA.)