Apple CEO hints at imminent 'Air' product announcement

Investing.com -- Apple’s iPhone sales showed mixed results in January, with demand remaining muted in key markets such as the US, China, and Europe, according to UBS analysts.

“Based on our analysis of Counterpoint data, global iPhone units were up 3% YoY in the month of January, growing roughly 200 bps slower than the overall market as China smartphone growth of almost 18% YoY was the key driver of market growth,” said the bank.

However, UBS notes that iPhone sales in China declined by over 2%, contributing to the relative underperformance of Apple’s devices.

In the US, iPhone sales dropped by approximately 2.5% YoY, slightly outperforming the overall market, which contracted by 4.4%. In Europe, the situation was more concerning, with iPhone sales declining by about 8% YoY, while the smartphone market grew by nearly 1%.

The declines in these key regions were somewhat offset by stronger performances in other parts of the world, particularly India, where iPhone sales surged by around 57% YoY, and in "Other" regions, where iPhone sales rose by almost 18%.

Despite these regional variations, UBS noted that iPhone’s global market share slipped by 43 basis points YoY to about 20% in January 2025.

In the US, iPhone’s market share rose to 65.5%, up 125 basis points, but in China and Europe, it saw significant declines. In India and other regions, iPhone’s market share increased by 395 and 140 basis points, respectively, showcasing stronger demand outside of the largest markets.

UBS maintained its price target of $236 and Neutral for Apple (NASDAQ:AAPL), “reflecting a lower equity risk premium, lower interest rates, and longer-term growth given the company’s buyback authorization.”

Investing.com -- Apple’s partnership with Alibaba Group Holding Ltd (HK:9988) (NYSE:BABA) is key for the US technology giant’s growth in China, particularly for the launch of its AI initiatives, Wedbush analysts led by Daniel Ives said in a Monday note.

“The biggest missing piece in Apple (NASDAQ:AAPL)’s AI launch has been its China strategy which has been in a holding pattern until a Chinese tech partner is officially approved by Beijing and set to launch,” Ives wrote.

“It appears the day has finally come with Alibaba emerging as the clear tech partner/winner for Apple Intelligence in the key China region,” added the analysts, who expect this collaboration to catalyze a resurgence in iPhone sales starting in the June quarter.

According to Ives, over 100 million out of approximately 200 million iPhones in China are poised for an upgrade, presenting a substantial opportunity for Apple. Despite losing market share to Huawei in the past year, Wedbush anticipates that Apple’s AI launch on the forthcoming iPhone 16 and the iPhone 17 release in September will reverse this trend.

“As we saw in Apple’s last quarter, Apple Intelligence is a catalyst around upgrades in the US and now the golden goose China region will be getting this technology launched in roughly three months,” analysts continued.

“We continue to view this first launch of Apple Intelligence as just the beginning of a broader AI strategy for Apple as we estimate roughly 25% of the world’s population will eventually access AI through an Apple device over the next few years,” they added.

Wedbush suggests that the partnership with Alibaba, a leader in AI and cloud services in China, comes at an opportune time, coinciding with additional stimulus measures from Beijing.

While Apple may be late to the AI party, Ives and his team stress that the iPhone maker is essentially a "toll collector" on its global ecosystem, as any AI app for consumers will ultimately pass through Apple, as seen with DeepSeek last month.

The analysts think market bears continue to underestimate Apple’s robust installed base of 1.5 billion iPhones and roughly 2.4 billion iOS devices worldwide. They forecast a return to growth in China for Apple in the June quarter, with more favorable comparisons projected into fiscal year 2026.

“While US tariffs remain a containable issue, we believe Apple led by Cook is able to balance its growth strategy in China as Cook is 10% politician and 90% CEO,” they concluded.