Apple iPhone Pent Up Demand 'Now Satisfied,' Maxim Warns

In a report published Wednesday, Maxim Research analyst Nehal Chokshi reviewed Apple Inc. (NASDAQ: AAPL)'s earnings report and guidance and how it reinforces his "bearish thesis."

Commenting on Apple's June quarter, the company's reported revenue of $49.6 billion was in-line with the consensus estimate of $49.3 billion. iPhone units of 47.5 million were in-line with the consensus estimates as well, but with a higher-than-expected average selling price which offset weaker-than-expected Watch sales.

Apple's 48.1 million iPhone unit sell-through rose 36 percent year-over-year and was consistent with the March quarter's 37 percent year-over-year gain. However, iPhone unit sell-through fell a record 20 percent from the March quarter. The analyst commented that a quarter-over-quarter decline for June is to be expected, but as China grows as a percent of revenue and due to Chinese Near Year' seasonality, the overall quarter-over-quarter decline for future June quarters should "continue to worsen."

According to Chokshi, Apple's September quarter revenue guidance of $49 billion to $51 billion "barely brackets" the $51 billion analysts were expecting. In fact, the midpoint revenue implies a 19 percent year-over-year growth and 1 percent quarter-over-quarter growth.

Chokshi continued that his recent survey of 800 plus international consumers indicated that Apple will see its iPhone buy being down approximately 20 percent year-over-year in fiscal 2016 and total 182 million units (versus 227 million in fiscal 2015). The analyst noted that the data is a result of a "massive" pent-up demand for large screen iPhones that was "satisfied" in fiscal 2015 along with an increase in smartphone lifecycles.

Chokshi further hypothesized that Apple is on track to capture 82 million new iPhone users in fiscal 2015, marking a record high. However, the dynamics working in Apple's favor is unlikely to repeat the following year. With that said, the analyst updated his fiscal 2016 revenue estimate to $226 billion which is 8 percent below the consensus estimate and represents a 3 percent dip from fiscal 2015.

Shares were maintained with a Hold rating and unchanged $144 price target.