Apple UBS Warns of Sluggish December iPhone Sales Amid Weakening China Demand

Apple Inc. (NASDAQ: AAPL) faces projections of weaker iPhone sales in December, according to UBS analysts. The firm attributes this to ongoing concerns over slowing demand and declining market share, particularly in China.

UBS adjusted its iPhone unit and revenue estimates for December to 74 million units and $67.2 billion in revenue, down from 77 million units and $69.7 billion, respectively. Despite some resilience in Apple’s services revenue, the revised forecast led UBS to lower its December quarter revenue projection by 2% to $120.8 billion—below Wall Street's estimate of $124.9 billion. Additionally, UBS reduced its earnings per share (EPS) estimate for the quarter to $2.25 from $2.31, compared to the street estimate of $2.36.

The analysis highlighted data from Counterpoint Research showing an 8% year-over-year decline in iPhone sell-through in November, with sales falling to 20.7 million units—largely driven by a sharp decline in China. The iPhone’s global market share also dropped to 20.1% in November, marking its lowest level since 2019. UBS emphasized that a sales decline during October and November, typically peak months for iPhone sales, signals challenges for Apple in the December quarter.

UBS now forecasts a 5% year-over-year decline in iPhone revenue for the December quarter, falling short of its estimates, the VA Consensus, and Apple’s implied growth outlook from the September earnings report. Slowing demand in China, heightened competition from local brands such as Huawei and Xiaomi, and regulatory hurdles delaying AI feature rollouts in China have compounded Apple’s challenges.

Nonetheless, Apple’s services revenue remains a bright spot, bolstered by strong App Store performance and demand for its software offerings, which may help offset broader declines in earnings.