Apple announced its first-quarter earnings (2018) on Thursday, January 25,and what people, and in particular investors, seem to be looking forth to is whether the company’s $999 iPhone X was hit or a letdown.
Wall Street has observed that that the sales of iPhone X didn’t gain momentum as expected in the first quarter that ended in December and is expected to drop sharply for the March quarter. Analysts have lowered their expectations for Apple’s second- quarter revenue guidance to as low as $60 billion from a previous average of $67 billion.
Combined with concerns about the impact of an imbroglio in which Apple acknowledged slowing down phones with worn-out batteries, the weak iPhone X performance has again raised the question of whether the company can keep up its rapid revenue growth without a new hit product. Analysts are also questioning whether Apple can boost its revenue even as iPhone sales essentially plateau.
UBS analyst Steven Milunovich wrote in a note to investors, “Apple will have to answer the question of what’s next. More services to monetize the base of one billion customers and eventually enhanced [augmented reality] capabilities may be part of the answer.”
Analysts still expect Apple to post record revenue, hitting the top of its $87 billion guidance for the holiday quarter. But they have slashed revenue estimates for the March quarter and expect the company to sell fewer iPhones in fiscal 2018 than initially thought.
