watch
now
Apple
shares
slipped
4%
on
Tuesday,
after
Barclays
downgraded
the
stock
to
underweight
and
slightly
trimmed
its
price
target
from
$161
to
$160.
Barclays
analyst
Tim
Long
wrote
in
a
note
to
clients
Tuesday
that
the
iPhone
15’s
current
“lackluster”
sales,
specifically
in
China,
presaged
similarly
weak
iPhone
16
sales
—
weakness
that
Long
expects
will
hold
true
for
Apple’s
hardware
sales
broadly.
“We
are
still
picking
up
weakness
on
iPhone
volumes
and
mix,
as
well
as
a
lack
of
bounce-back
in
Macs,
iPads
and
wearables,”
Long
wrote.
Analysts
and
investors
had
noted
specific
weakness
in
China
iPhone
sales
as
far
back
as
October.
Bloomberg
has
previously
reported
that
the
Chinese
government
has
issued
informal
guidance
forbidding
state
employees
from
using
iPhones.
The
Chinese
government
has
denied
issuing
such
guidance.
Long
expects
that
Apple’s
lucrative
services
business
will
also
see
decelerated
growth,
in
part
due
to
regulatory
scrutiny.
Gross
margin
in
Apple’s
services
businesses
is
roughly
double
the
margin
Apple
makes
on
all
its
hardware
products,
and
Apple
CEO
Tim
Cook
highlighted
“better-than-expected”
growth
in
that
unit
on
an
earlier
investor
call.
But
Barclays
doesn’t
necessarily
believe
that
growth
is
reliable
in
the
long
term.
“In
2024,
we
should
get
an
initial
determination
on
the
Google
TAC,
and
some
app
store
investigations
could
intensify,”
Long
wrote,
referring
to
the
payments
Google
makes
to
Apple
to
retain
its
default
search
status.
Google
CEO
Sundar
Pichai
previously
confirmed
that
the
company
pays
36%
of
its
Safari
search
revenue
to
Apple.
Regulators
have
been
scrutinizing
both
Apple
and
Google
and
the
default
search
status.
