Wall Street is getting excited about the prospects for Apple’s upcoming launch of the iPhone 8, but not everyone is expecting the phones to sell like hotcakes.
In a research report released Tuesday, Deutsche Bank warned that Apple is facing a regular upgrade cycle and not the so-called “supercycle” that others on Wall Street have been discussing.
“The real supercycle was the iPhone 6 and iPhone 6 Plus cycle,” Deutsche Bank said in an interview covered by CNBC. “That cycle saw peak iPhone shipments of 231 million in FY-15.”
Deutsche Bank is forecasting Apple to ship around 230 million iPhones in fiscal year 2018, below the consensus which stands at 244 million units shipped. The Wall Street bank said expectations for Apple’s prospects are too high and investors will undoubtedly be disappointed with the iPhone growth from fiscal year 2018 to fiscal year 2019.
“The market has become overly optimistic on iPhone’s potential sales into the upcoming iPhone launch this fall, and is ignoring the fundamental challenges Apple faces in the smartphone market, which include saturation in mature markets, elongating refresh cycles, declining share plus increased competition in China, and a growing secondary market,” Deutsche Bank said.
The firm also noted it is having a hard time understanding where Apple is getting all of its new iPhone buyers.
In the fall, Apple is expected to roll out three new iPhones, including a high-end iPhone 8 coming equipped with an OLED screen and a price tag that starts at $1,200. It’s also expected to launch a new iPhone 7 and iPhone 7 Plus. The $1,200 price tag for the new iPhone 8 may turn off some consumers who aren’t used to spending that much for a mobile phone.