Though it is too early to say for sure, but it seems Apple (AAPL)’s ‘cool’ touch products like the iPhone and iPad are losing some of their steam.
“In conducting our regular field work with the hardware supply chain, we again find evidence of reduced demand to Apple’s suppliers for iPhone 5 related components,” Yeung said in his note. “While production does not directly translate to sales (for example, we estimate Apple finished 1Q13 (Dec) with [around] 10M iPhone units in inventory), we suspect this is an indication of softer demand for iPhone 5 and iPhone 4S.”
As a result, Yeung has reduced his iPhone sales projections to 34 million from 35 million for the current March quarter, while also lowering the June quarter consensus to 25 million from 32 million.
For the iPad, however, the numbers are starting to look rather bad. In the U.S. and Japan, two key markets where digital device consumers are some of the savviest in the world, the 9.7-inch iPad tablet sales are in decline by more than 10% on a y/y basis in Q4’12. As a result, Yeung, who believes the iPad Mini is “undoubtedly cannibalizing” sales of its larger cousin, slashed his total June-quarter iPad sales forecast from 19.6 million to 19 million.
Yeung also claims in his note that “product transitions in 7-inch models may be contributing to reduced production in [the June quarter],” which he sees as a “risk to consensus estimates.”
As far as speculation about the much-rumored budget-iPhone that Apple may unveil anytime this year, Yeung said he has seen no evidence of that.
“Despite much speculation amongst investors and third-party research, we find limited evidence of a low-end iPhone at this stage,” the analyst said. “[W]e continue to expect iPhone 5S to be launched (albeit in early C3Q13 vs. late C2Q13) and anticipate a large-screen iPhone in late 2013/early 2014. But clear indications of a low-end iPhone remain elusive.”
Apple’s stock fell $5.48, or 1.27%, to $425.66 in afternoon trading Wednesday. Pre-market: down $1.06, or 0.25%, to $424.60 / March 7, 5:57AM EST NASDAQ real time quotes.