The iPhone may be in store for a tough quarter, according to one analyst.
Apple will give up some of its smartphone market share in the March quarter, "raising concern about the on-going dominance of the iPhone," Citi analyst Glen Yeung said in an investors note out today. He cited strong demand for Samsung devices as the reason.
Recent reports say that Apple slashed iPhone 5 component orders for the current quarter, triggering concerns that demand for the flagship phone has diminished. Several analysts believe such concerns are overblown, instead attributing the cuts to improved manufacturing yields for the latest iPhone.
But Yeung thinks the cuts may be due to rougher competition.
"Our checks mid-December revealed initial signs of order cuts from Apple, now evident across a larger array of suppliers," the analyst said. "We acknowledge the true nature of these cuts is as yet inconclusive, but we suspect they reflect growing demand for competitive offerings (e.g. Samsung), particularly outside the U.S."
Assuming the cuts signal the likely number of shipments, Yeung sees iPhone units sales of 35 million for the current quarter. That's below Wall Street's consensus of around 42 million.
Will Apple bounce back in the June quarter if it releases an iPhone 5S? Yeung doesn't see that in his crystal ball.
"Based on our understanding of the iPhone5S (same form factor), we do not view the forthcoming launch (scheduled for C2Q13) as a catalyst for market share regain," the analyst said.
Regardless, Apple's December quarter should prove fruitful. Tomorrow, the company will reveal results for the final calendar quarter of 2012, which is the first fiscal quarter for Apple. Yeung thinks iPhone sales could reach or even beat Wall Street's forecast of 45 million to 50 million, thanks largely to manufacturing improvements from October to December.
Meanwhile, the iPad is a mixed bag, according to the analyst.
iPad Mini sales have been strong. Though limited by supply, manufacturing builds of the small tablet are expected to rise between 20 percent and 40 percent in the next quarter.
However, demand for the Mini's larger cousin has weakened. Sales of the 9.7-inch tablet are forecast at 13 million for the current quarter. But Yeung's supply chain checks say production will drop by 30 percent to 40 percent next quarter.
Looking at the year ahead, Citi expects Apple to unveil the iPhone 5S in June, followed by a Retina Display iPad Mini, an iPad 5, and a low-end iPhone in September.