Apple Inc (NASDAQ:AAPL, ETR:APC)’s near-term growth is at risk amid softening iPhone purchase intent in key markets, analysts at UBS have flagged.
Based on findings from the UBS Evidence Lab, which surveyed more than 7,500 smartphone users globally, the analysts warned that a combination of weakening consumer intent and longer device replacement cycles may pose headwinds for iPhone demand.
Analysts noted that the t12-month global iPhone purchase intent in the US fell a point to 17%, the lowest reading in five years, while intent in China fell to 16% from 22% a year ago.
UBS noted the relative strength ot Apple’s customer loyalty in the US versus China. “iPhone retention rate in the US remained strong at approximately 88%, compared to approximately 75% in China as Apple has faced competitive and macroeconomic headwinds in the second largest market for iPhones,” the analysts wrote.
Consumers are also holding onto their iPhones for longer periods. “The average age of an iPhone in the use base is 22.9 months, trending higher from 21 months last year and 21.8 months last survey,” the analysts wrote, noting that this suggests slowing upgrade cycles may further weigh on near-term sales.
GenAI interest muted
Outside of China, overall net interest in a GenAI smartphone remains “relatively lukewarm,” the analysts wrote.
“Net interest in a GenAI smartphone remains strongest in China at ~74%, as net interest in other regions remains relatively muted as interest in Apple Intelligence is tepid,” they wrote.
The main concern was pricing at about 50%, followed by privacy concerns at 39% and availability of applications at 28%. “Further, the survey data indicated that consumers outside of China were not willing to pay a significant premium for a GenAI smartphone,” analysts wrote.
UBS maintained a ‘Neutral’ rating on Apple with a 12-months of $210, reflecting roughly 28 times its estimated CY26 earnings per share of $7.49. “At 28x, Apple would be trading roughly in-line with the trailing five-year average,” analysts wrote.
Shares of Apple were little changed on Monday, trading at about $205 in the early afternoon.