Do you think that demand for Apple’s products is being destroyed or simply delayed? Most sane people believe the latter. Moody’s credit analyst Raj Joshi agrees, writing that demand for Apple products will bounce back after coronavirus crisis ends.
He concludes that Apple’s business issues have largely shifted from China supply-chain interruptions to demand issues in China, Western Europe, and the U.S. He cautions that Apple will see weakness through the June quarter, and notes there is “significant uncertainty about the severity and duration of the economic effect of the coronavirus.”
But… Joshi still thinks Apple can boost revenue for the September 2020 fiscal year by 5%. He says the March and June quarters combined are likely to be about $4 billion below his previous forecast in January 2020—but he says the company “should be able to offset more than half of the combined revenue shortfall” in the September quarter.
“We believe that Apple should be able to recover a large share of lost sales resulting from the economic impact from coronavirus by the end of fiscal 2020, because a majority of the sales for Apple’s most profitable product line, iPhones, are driven by replacements of older versions of the product,” he writes. “The company has a loyal installed base as a result of its strong brand reputation and very high customer satisfaction rates. Apple typically launches new iPhones in September and will likely concurrently run promotions to spur the sales for older generation of products.”
MacDailyNews Take: Yes, Moody’s analyst is correct: demand for Apple products will bounce back after coronavirus crisis ends. Hey, any reassurance in times like these is a Good Thing™, however obvious it may be.
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