Growth Of Apple's iPhones May Lag Behind Rivals

UBS analysts predict Apple's iPhone shipments will fall this year, marking the first time in four years that the company's growth rate is lower than its competitors.

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Apple's (ticker: AAPL) iPhone shipments are forecast to reach 229 million this year, down 0.7% from last year, according to UBS. There is an expectation that Android smartphones will ship at a growth rate of 3.2% in the next few years, backed by Google's parent company Alphabet (GOOG), which owns Google. 

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Taking a closer look, UBS analysts wrote in a research note on Monday that this would be Apple's first time since 2019 that it would be underperforming peers in terms of units. Apple is likely to see a setback in its relative growth this year as sales in Asian markets will drive sales this year, as opposed to Apple's key North American market this year, according to the report. 

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International Data Corp reports that global smartphone shipments fell 11% last year to 1.21 billion, the lowest level since 2013. Smartphone shipments are expected to grow by 2.5% in 2023 and 3.5% in 2024, according to UBS. 

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Even though iPhone shipments are forecasted to fall, UBS analysts contend that Apple remains one of their most preferred stocks in the sector due to a growth in its services revenue. According to their rating, the stock has a Buy rating and a target price of $180, which is up from Friday's closing price of $152.55. 

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Analysts are, however, cautious when it comes to the stocks in the Apple supply chain with Sell ratings on AAC Technologies 2018 -0.65% (2018. HK), LG Display LPL +1.02% (LPL), LG Innotek 011070 +2.08% (011070. Korea) and Luxshare Precision 002475 -1.42% (002475. China). 

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The proxy firm Institutional Shareholder Services is advising Apple's shareholders to vote in favor of the company's pay packages for its top executives, including CEO Tim Cook, as part of its opinion on Apple's share price.

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As reported by Trade Algo, ISS has recommended Apple shareholders vote for the company's executive pay packages and director nominees at its upcoming shareholder meeting to make the company a more competitive company. ISS has committed to a different course of action than it did the previous year when it opposed Cook's pay and bonus package of nearly $100 million that he was awarded in 2021. 

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The target compensation package for Cook is set at $49 million this year, down from $84 million in 2022, a decrease that was at least partly brought about by his request.

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The investment firm is recommending Apple investors vote in favor of a resolution to demand a report on median gender and racial pay gaps at the company, which the iPhone maker has opposed, according to Trade Algo.