Apple's former CEO Sculley: iPhone demand in China is not strong, trouble is big

According to foreign media reports on July 11, John Scarley (John Sculley), Apple's former chief executive, said in an interview a few days ago that Apple's biggest problem is how to deal with falling demand for high-end iPhone.

Scully said: "For Apple, this is the worst time, because no matter what happens in China, Apple iPhone sales have slowed significantly."

Scarley served as Apple's chief executive from 1983 to 1993 and was replaced because of Apple's poor performance. Although he has been out of office for a long time, the current venture capital investor has been critical of the technology giant. An Apple spokesman declined to comment on Scarley's comments.

Still, those Wall Street people who are more interested in the year 2019 may also agree with Scully's point of view. Rosenblatt Securities, the company's hot stock (up by 29% this year) down to "sell", grabbed several headlines.

Analysts at the company wrote that while he did not think Apple's shares were short, the company's situation would face a "fundamental deterioration" over the next six to 12 months. He also said the new iPhone sales would be disappointing and expected Apple's service revenue to slow down.

"We don't think there will be much improvement in iPhone sales, and we are even more concerned about the situation in the second half of the year," analysts said. In addition, Google's upcoming 5G smartphone will put a lot of pressure on Apple's iPhone market share.

Just a few days ago, Citigroup analyst Jim Suva slammed Apple again before Apple’s July 30 earnings report. He said: "We are still lower than Wall Street in terms of sales and earnings per share expectations, and we expect Apple's share price to fluctuate in the coming months as the market is generally expected to be lowered."

In a July 2 report, Suva wrote: "Recall that we have significantly lowered our expectations after the Asian trip in May, which indicates that the demand for iPhone in China and China is not so favorable. The Chinese market accounts for 18% of Apple's sales, and we think this ratio may be halved."

In fact, Suva’s report to Apple customers since late May has caught the attention of the market. Suva has lowered its iPhone sales forecast for the second half of 2019 by about 7 million units due to concerns about China's demand. He then “substantially” lowered sales and profit expectations for the company.

Suva said at the time: "We are sharply reducing the iPhone sales forecast, because we believe that as the Chinese people prefer to buy national brands, the demand for Apple iPhone in China will slow down. Our independent due diligence shows that the brand for the iPhone Image demand is not so favorable, and iPhone sales have recently deteriorated."

Interestingly, Suva still rated Apple's rating as "buy", which suggests that it seems to value Apple's long-term value rather than any re-acceleration of recent sales or profits. In his latest letter, Suva warned: "We still maintain our Buy rating, but we expect the stock price to fluctuate in the future." (Tencent Technology Review / Jinlu)

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