Barclay is downgrading Apple. It's now an underweight at that firm. It is the focus of today's

Tech check with Steve Kovac. Steve. Hey there David, yeah, Apple starting the new year with that downgrade from

Berkeley is not a good start. Sure it's falling about 3% or so and Barclay is really laying out the

headwinds it's going to expect that's going to result in a tough March quarter.

So here's the case they lay out in the note today. Calling the iPhone 15 sales quote

lackluster especially in China we know all the problems going on there and says

that weakness will continue with the launch of the next iPhone likely this

fall and a UBS note also backing that up with

November iPhone sales data basically showing the same thing a lot of weakness in

the US and China also saying no rebound in Mac and iPad demand post- Pandemic.

They need to fall back to those pre-COVID levels before there's a recovery and then on services

we've seen growth accelerate in the last quarter or so

likely going to be up 10% year on year for the December quarter but that's because

comps are a lot easier from a year ago and Barclay is expecting deceleration in growth and

services throughout 2024 and even into 2025. Now some reasons behind that

regulatory risks. DOJ is going to have a verdict pretty soon

here against Google and that puts the payments it makes to Apple

at risk.

We all know of course Apple pays billions,

maybe as much as 19 billion a year, to be the default search engine on

Apple devices. Plus, there's the Digital Markets Act going into full effect over in Europe,

and that is a threat to App Store revenue.

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