Analysts See Risks in Apple Inc. (NASDAQ: AAPL) Stock

The stock of the tech giant Apple Inc. (NASDAQ: AAPL) is taking some blows after successive negative views of analysts at JP Morgan, Morgan Stanley, and Barclays which were released recently. Most of the statements of these experts were regarding the drop in the shipments of the iPhone in the future. Additionally, analysts have pointed out the weakness in the supply chain of the Cupertino, California-based tech powerhouse.

According to Narci Chang, an analyst at JP Morgan, most of the suppliers of Apple Inc. displayed slipping month-over-month sales trends in the previous month. Chang believes that the weakness was brought about by the drop in terms of iPhone orders. The JP Morgan analyst stated that there are notable downside risks for the December quarter results of the tech titan, while the anticipations for the March quarter “seem unrealistic.”

Previously, the analyst had forecasted about 75 million to 80 million units in the December quarter. However, Mr. Chang now expects that there will be shipments of around 75 million to 77 million units. Furthermore, the JP Morgan analyst estimates shipments of 45 million to 50 million units for the March quarter.

Research firms have been emphasizing smartphone market saturation to be a major issue for smartphone makers. Based on the recent study by the IDC, developed markets all over the world are nearing maturity phase in a rapid manner. In addition, there is growing competition in the industry from high spec and low cost smartphone makers such as Huawei and Xiaomi.

Apple’s failure to highlight data on iPhone 6s orders during the first 24 hours after the launch has raised some doubts regarding the device’s success. Also, the tech giant has also been missing forecasts for iPhone shipments during the previous two quarters.

Meanwhile, Katy Huberty at Morgan Stanley said that Apple Inc. may not be able to surpass the iPhone sales records in 2014. The analyst has lowered her estimates for the sales of iPhone units during the December quarter. From 79 million, Huberty brought it down to 74 million.

In the previous holiday season, the tech powerhouse was able to sell 74.5 million units of the smartphone (from October to December). During the past month, Credit Suisse also supported this view, indicating a survey which has shown weak orders from the Asian supply chain of the iPhone maker.

Aside from the Morgan Stanley analyst’s iPhone sales estimate for the December quarter, she has also lowered her forecasts for the Marh quarter—from 63 million, she decreased it to 52 million. According to Ms. Huberty, the reason behind this is the tech company’s move to enter developing markets which can be considered challenging, since exchange rates and customs taxes can make the devices highly expensive in these countries. Furthermore, the growth of the iPhone in China, one of its major markets, is also believed to be losing steam.

The analyst anticipates that the sales of iPhones will experience a 6-percent drop in the next fiscal year. Finally, Huberty forecasts a revenue growth of 6 percent in the following year, driven by the Apple Watch and Other Services segment.