UBS analysts highlighted a challenging month for Apple (NASDAQ:AAPL) iPhone sales, noting that the company saw minimal growth compared to its competitors in June, according to preliminary data from Counterpoint.
In their note, UBS pointed out that "iPhone unit sell-through was up roughly +1% in the month compared to global smartphone growth of ~4%," indicating a marginal performance that trailed the broader market.
They noted that this resulted in a decline in iPhone's market share by 40 basis points year-over-year to approximately 16.3%. Meanwhile, UBS said several Chinese OEMs, such as Xiaomi and Vivo, outperformed Apple during the same period, with Xiaomi seeing a 25% increase in units and Vivo up by approximately 6%.
Looking at the broader June quarter performance, UBS reported that iPhone unit sell-through reached around 45 million units, marking a 1% decline year-over-year.
This contrasts with a 6% growth for the overall smartphone market. The weaker performance in sell-through also translated into a decline in iPhone's market share for the quarter, which was slightly below 16%, down significantly from over 100 basis points compared to last year.
UBS analysts attributed some of the June quarter's challenges to competitive pressures and economic conditions, particularly in China. They noted that "iPhone declines in the June quarter were mitigated by up 20% price discounts on iPhone 15s during May," underscoring the difficulties in the Chinese market amidst economic headwinds and a resurgent Huawei.
In terms of valuation, UBS maintained a price target of $190 for Apple, reflecting a multiple of 27 times their estimated earnings for CY25/CY26. They highlighted the company's premium valuation relative to the market, citing a challenging growth environment and uncertainties surrounding Apple's AI strategy as key considerations.