TLDR
- Apple stock remained flat as research firm Counterpoint cut global smartphone shipment growth forecasts from 4.2% to 1.9% due to tariff concerns
- Trade uncertainty and potential tariff reinstatement are forcing smartphone makers to adjust supply chain strategies
- Apple is moving part of its supply chain from China to India, with a fifth of US iPhone imports now coming from India
- North American smartphone market expected to decline as tariff-driven price increases reduce consumer demand
- Evercore ISI maintains Outperform rating with $250 price target, citing tempered expectations for upcoming WWDC event
Apple stock showed little movement today as new industry forecasts painted a cautious picture for global smartphone sales. The tech giant’s shares held steady despite research suggesting slower growth ahead for the entire smartphone market.
Research firm Counterpoint delivered a reality check to the industry this week. The firm slashed its global smartphone shipment growth forecast from 4.2% to just 1.9% for this year. The dramatic revision stems from ongoing trade uncertainty and tariff concerns.
President Trump’s tariff strategy looms large over the industry. While levies on smartphones and electronics received a 90-day suspension, the threat of reinstatement keeps manufacturers on edge. Higher rates already affecting key markets like the EU, UK, and China add to the pressure.
Apple isn’t sitting idle in this changing landscape. The company is actively reshaping its supply chain to reduce China dependence. Manufacturing operations are expanding in India and the United States as part of this strategic shift.
The numbers tell an interesting story. Apple sells over 220 million iPhones annually worldwide. A fifth of total iPhone imports to the United States now come from India, with China handling the remainder.
Supply Chain Shifts
This geographical diversification reflects broader industry trends. Smartphone makers across the board are rethinking their production strategies. Cost pressures from potential tariffs are forcing companies to explore new manufacturing bases.
Counterpoint’s research highlights the regional impact of these changes. The firm revised China’s year-on-year shipment growth down to nearly flat. Apple and Samsung face particular pressure as they navigate passing increased costs to consumers.
The North American market presents the biggest challenge. Smartphone prices are expected to rise due to tariff effects, naturally dampening consumer demand. This price-demand dynamic creates headwinds for even the strongest brands.
Despite these challenges, Counterpoint’s Liz Lee sees reasons for optimism. “We still expect positive 2025 shipment growth for Apple driven by the iPhone 16 series’s strong performance in Q1 2025,” she stated. Premium market trends in India, Southeast Asia, and the Gulf Cooperation Council provide long-term support.
The competitive landscape shows interesting divergence. Chinese manufacturer Huawei received an upgraded growth outlook from Counterpoint. The company benefits from easing supply chain bottlenecks and momentum from its self-developed chips.
Analyst Outlook
Counterpoint isn’t alone in its cautious stance. International Data Corporation made similar moves last month. The research firm cut its 2025 global smartphone shipment growth forecast from 2.3% to 0.6%.
Both firms cite similar concerns. Tariff-driven economic uncertainty and more cautious consumer spending patterns drive their revised expectations.
Meanwhile, Wall Street analysts maintain their confidence in Apple’s long-term prospects. Evercore ISI reiterated an Outperform rating with a $250 price target. The current trading price sits at $203.32, suggesting upside potential.
The analysts expect a quieter Worldwide Developers Conference this year. Fewer major announcements are anticipated compared to previous years. Apple plans to unveil foundation models for app developers, enabling on-device AI capabilities.
New partnerships beyond OpenAI are on the horizon. Perplexity and Gemini emerge as potential AI partners for Apple. A major operating system overhaul is expected, including new naming conventions with years at the end.
We're witnessing the birth of the "AI partnership era."
Apple is now partnering with OpenAI for ChatGPT, Google for potential Gemini integration, and Anthropic for coding.
The winners won't be the best builders, but the best integrators.
But there's a deeper lesson here: pic.twitter.com/B5iXVouLEs
— Fernando Cao (@thefernandocz) June 3, 2025
Gaming remains a key focus area. Apple plans to introduce a centralized gaming app that comes preinstalled. Gaming generates approximately 50% of App Store revenue, making this a strategic move.
Apple’s AI strategy differs from competitors. The company focuses on smaller on-device models and efficient large-scale models. This approach avoids the massive AI capital expenditure seen elsewhere in tech.
The revenue model takes a different approach too. Apple plans to charge fees to model providers for access to iOS users rather than shouldering development costs directly.
Evercore analysts predict incremental improvements at WWDC rather than groundbreaking announcements. More substantial updates are expected in 2026, supporting their maintained Outperform rating and $250 price target.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
