Apple Inc.

The stable outlook reflects our expectation that Apple will maintain a commitment to a minimal financial risk profile as it shrinks its balance sheet over the next several years through shareholder returns, debt repayments, and potential acquisitions. The most likely cause of a downgrade would be the company adopting a more aggressive financial policy than its current net cash neutral goal such that adjusted leverage exceeded the lx area. Although unlikely, a significant loss of market share in its smartphone business due to greater competition from established or emerging competitors, leading to revenue and margin compression, could also trigger a downgrade. We do not expect an upgrade over the next two years given Apple's high product concentration, which is subject

...iPhone revenues are expected to decline in fiscal 2019 due to weaker demand for higher-ASP devices. Apple Inc.'s iPhone revenues grew 18% in fiscal 2018 despite relatively flat unit growth as it continued to introduce more feature-rich phones with higher average selling prices (ASPs). Apple's latest phone releases continue to push the ASPs even higher, but consumers appear to be slowing their upgrades. Given our expectations for the smartphone industry to be relatively flat in 2019, continuing uncertainty around trade friction that could hurt iPhone sales in China, and a recent Chinese court ruling against Apple that may restrict sales of certain older-model iPhones, we now expect unit sales to fall near double-digit percents in fiscal 2019, driving revenue declines in the mid-single-digits....

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