Wells Fargo Sours On Apple’s iPhone Shipments

Another Wall Street analyst is souring on Apple’s iPhone sales for the second quarter, with Wells Fargo lowering its forecast earlier Tuesday (April 23).

According to a report in SeekingAlpha, Wells Fargo said in a research report it expects second-quarter iPhone shipments to come in at 40.4 million, down from its past target of 44 million iPhones shipped. The Wall Street firm said in the note that investors should adopt a “cautious stance” when it comes to Apple.

Apple is slated to report quarterly earnings after the close of trading April 30. For the June quarter, Wells Fargo said it expects “weak implied iPhone shipment trends,” the report said.

The call out of Wells Fargo comes as Apple struggles with lackluster demand for the iPhone in the U.S. and abroad. For its first quarter, Apple reported it shipped between 37 million and 42 million units, lower than the 40 million to 45 million units its was expected to ship. The Cupertino, California technology company blamed slow demand for its iPhone Xs and XR. Apple has been facing a mobile market that is becoming saturated, with longer life cycles for phones. Consumers are also reluctant to pay a lot for a mobile device these days, hurting Apple’s sales. It’s feeling the pain particularly in China where local competitors are churning out similar devices for a fraction of the price.

In addition to iPhone shipments, analysts and investors will be paying close attention to what Apple has to say about its services business. With the iPhone losing some of its luster, Apple has been pouring more money into its services, which include iTunes, Apple Pay and iCloud. Its also gearing up to launch the Apple Card credit card this summer. Customers apply and are approved through the mobile wallet on the iPhone, and can use it via Apple Pay immediately. Cash back rewards are substantial, and Apple is touting zero fees with the card.