Apple's China iPhone Sales Likely Fell in January. February Could Be Worse, UBS Says.

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February Could Be Worse, UBS Says. Apple’s China iPhone Sales Likely Fell in January. February Could Be Worse, UBS Says. Expect Bleak Apple iPhone Sales In China For February, Warns UBS

Apple’s smartphone sales fell in China during January, but there will be an even bigger hit for February due to supply and demand issues linked to the coronavirus, says UBS.

Apple’s China iPhone Sales Likely Fell in January. February Could Be Worse, UBS Says.

Apple’s smartphone sales fell in China during January, but there will be an even bigger hit for February due to supply and demand issues linked to the coronavirus, says UBS.

https://www.barrons.com/articles/dow-jones-industrial-avearge-had-its-third-worst-point-drop-ever-dont-panic-51582584326 https://www.marketwatch.com/articles/apple-warned-sales-revenue-coronavirus-analysts-say-its-a-blip-51582035114 https://www.barrons.com/articles/dow-jones-industrial-average-set-to-drop-800-points-what-history-says-happens-next-51582553267?mod=hp_LATEST mailto:bkollmeyer@marketwatch.com Apple’s China iPhone Sales Likely Fell in January. February Could Be Worse, UBS Says. By Barbara Kollmeyer Photograph by Kevin Frayer/Getty Images UBS warned about iPhone sales possibly falling more in China.

It looks like near-term sales of Apple’s iPhones in China will be bumpy, and that isn’t terribly surprising, given the grim coronavirus news updates keep coming.

Analysts at UBS analyzed government smartphone data that suggest China’s overall market fell 37% annually in January, versus declines of 11% and 19% in the last two years. Apple (ticker: AAPL) managed a 5% gain year over year, thanks in part to easier comparisons.

But the data indicate Apple’s sales in China dropped 28% in the month, just ahead of a 30% decline for the overall market. Analysts Timothy Arcuri and Munjal Shah say brace for a grim February.

“Given the total shutdown of retail stores, corporate offices and manufacturing plants in the first half of the month of February and a gradual and uncertain pace of normalcy, February shipments would likely be materially worse,” said the analysts, who recently trimmed their total iPhone unit estimates for the March quarter.

The iPhone maker has already warned that it will miss a prior forecast for the March-quarter revenue due to the coronavirus. Fast forward a week, and the news has worsened with clusters of coronavirus cases in South Korea, Iran, and in Europe.

Even looking to the next quarter may be cold comfort. “While there will have to be some channel re-stocking, the pace of recovery in the June quarter is more dependent on the demand side—which is very hard to predict,” said Arcuri and Shah.

Investors appear more focused on the company’s autumn product launch, and there is “still no reason to become materially more cautious on 2021 expectations—the key for the stock right now,” say the analysts. They rate Apple a buy with a $355 price target, noting that its long-term opportunities from 5G, foldable phones, wearables and new services remain unchanged.

Looking ahead: Apple shares edged up 0.6% to around $300 on Tuesday, a day after a slump of nearly 5% as fears over coronavirus contagion gripped investors and triggered a global equity rout. Despite its warning last week, shares are up 1.5% still year-to-date, and the stock has plenty of fans.

But investors may find their ability to look to Apple’s potentially brighter future tested in the coming weeks if those coronavirus headlines persist and worsen.

Write to Barbara Kollmeyer at bkollmeyer@marketwatch.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.