Goldman Sachs now sees Apple's earnings per year for calendar year 2019 at $13.40, roughly in line with the company's last three years next-12-month average.
Apple has cut production orders in recent weeks for all three iPhones launched in September, The Wall Street Journal reported Monday. The company stunned many analysts and investors on Nov. 1 when it said it will no longer break out individual sales numbers for the iPhone, iPad and Mac. The three main product lines will be wrapped into one reported revenue figure.
The iPad maker is morphing from a business propelled by the volume of devices it ships into one that stresses luxury products and software sales. That evolution has been marked by shockwaves for much of the technology space, with several of Apple's largest semiconductor suppliers noting marked declines in order volume.
Apple shares dropped by 5 percent last Monday alone after one of its chipmakers, Lumentum (LITE), said one of its largest customers reduced shipments. Though Lumentum, which makes 3D sensing lasers used in Apple's Face ID technology, did not mention Apple by name, Wall Street punished the iPhone maker as the prime suspect.
"You're talking not just about what Apple represents, but its effect across the whole food chain, including semiconductors," Wedbush analyst Daniel Ives told CNBC last week. "As the core 'FANG' names have just taken gut punches left and right over the past few months, this latest downturn for Apple — the degree of it — has really caught investors off base."
Apple's decision to no longer break out iPhone sales data, meanwhile, is being heralded as a signal that the phone maker may be expecting softer iPhone volumes in the future. The company has attempted to remedy the slowing volumes with pricier phones, but even those efforts appear to be reaching their limit, Goldman said.
"Apple's success with iPhone X demand this summer and then a relatively healthy start to the XS cycle this fall suggested to us that pricing power was still intact," Hall wrote. "However, the laboratory of the market now points to Apple being at the limit of their price premium for the iPhone. In our experience with mobile phones, when pricing power is lost, consumer technology companies tend to either lose margins or market share or both."