Apple revised its guidance for the first time since Tim Cook became CEO early this month. The Cupertino-based company lowered its guidance for the first quarter of fiscal 2019 by nearly $9 billion suggesting weaker demand for iPhone than previously anticipated. Cook said the lower revenue guidance is due to the ongoing trade war between the US and China, and weaker macroeconomic conditions in the Greater China region. The decline in demand for iPhone has changed Apple’s fortunes, with the company dropping to third place in smartphone sales, and its share price has also depreciated since early this month.

Now, a new report from analyst Ming-Chi Kuo suggests Apple‘s worst days are behind it. He believes Apple’s “worst” will be “soon over” in terms of iPhone sales slowdown. In his newest research note for TF International Securities obtained by MacRumors, Kuo says that the “share prices of Apple and most iPhone suppliers are generally priced in the negative.” Kuo has also cut the estimate for iPhone shipments in the first quarter of 2019 from 38-42 million units to 36-38 million units, and adds that the “demand for new models in China and emerging markets is lower than expected” but quickly points out that this decline will begin to ease from start of second quarter.

“Our report published on December 14, 2018, was the first to cut the estimation of 2019 iPhone shipments to 190mn units or less; the current market consensus on 2019 iPhone shipments (160–180mn units) is much lower than our estimation and we believe the share prices of Apple and most iPhone suppliers are generally priced in the negative,” Kuo writes in the report. “We maintain our forecast of 188–192mn units for 2019 iPhone shipments. We believe the downside risks of share prices for the Apple and iPhone supply chain are limited in the near term given that 2Q19 iPhone shipments will likely be better than the market consensus,” he continues.

He estimates the slowdown in iPhone shipments to ease during the second quarter of 2019 and reach 34-37 million units, which is slightly higher than the previous consensus of 30-35 million units. These numbers would still translate to a year-over-year decline of 14 percent but suggest Apple’s worse is over where the company is expected to report 29 percent drop in shipments during the first quarter.

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Kuo’s prediction comes with an underlying condition that the trade tensions between the US and China should not worsen further. He expects Apple’s iPhone shipments in the Greater China region to improve, and is expected to remain flat compared to the second half of 2018. Kuo expects Apple to ship between 188 and 192 million iPhone in 2019, which will be lower than what the company shipped in 2017 and might remain flat in comparison with 2018.

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