Here's Where In The World Goldman Sachs Expects iPhone Sales To Fall

Goldman Sachs’ Simona Jankowski expects iPhone’s share to decline modestly in the developed markets during CY16. The analyst maintained a Buy rating on Apple Inc. (NASDAQ: AAPL), while lowering the price target from $136 to $124.

The analyst mentioned that iPhone shipments were expected to decline in North America, Western Europe, Japan and South Korea, primarily due to lower upgrades.

Related Link: Goldman Lowers iPhone Estimates, Cuts Apple's Price Target By 9%

In addition, Greater China is expected to drive a 4 percent year-on-year decline in iPhone sell-through, along with an 8 percent decline in sell-in during CY16.

“We are modeling the iPhone’s market share to decline 20bps yoy in North America, 210bps yoy in Japan, and 330bps in Greater China. We expect modest share gains in Western Europe,” Jankowski stated.

The analyst explained that this share loss in China was largely driven by structural issues, rather than due to share loss in the premium segment or a decline in customer loyalty.

Emerging Markets Offset China

“We see other emerging markets providing some offset to declines in China, with nearly a point of market share gain on top of over 10 percent market growth,” Jankowski said.

The analyst expects blended iPhone ASP declines during FY16, FY17 and FY18, driven to a large extent by a greater shift to the emerging markets, where a higher mix of lower end SKUs is expected.

“Going forward, we expect ASPs to trend down on increasing emerging market shipments, with some relief from stabilizing FX,” the analyst added.