Despite Apple stock having fallen to reflect lower iPhone X demand, one Wall Street analyst claims that expectations are “still too high.”
In a note to clients, Nicolas Baratte of CLSA says that any estimate over 35 million for Apple’s fourth quarter iPhone X volume estimate is overstating demand. The prediction follows hot on the heels of a Taiwanese news report claiming that weak demand has caused Apple to cut orders for the iPhone X from 50 million to 30 million units.
“We maintain that 2017 fourth-quarter iPhone X volumes were at 30 to 35 million, and we are very skeptical that volumes will increase in the first quarter of 2018,” wrote Baratte in a note published on Tuesday. “This does not reconcile with the expectation of pent-up demand or push-out to the first quarter of 2018 in our opinion: consumers who wanted to get an iPhone X in December 2017 already have it.”
The report from Baratte suggests that Apple may reduce the price of the iPhone X to try and increase sales.
iPhone X demand and supply
Reports of lower-than-expected iPhone X sales came as something of a surprise. At first, it appeared that Apple had simply done a great job of managing demand by getting supply to meet demand to such an extent that next day delivery was achieved for all models of the iPhone X by the end of 2017.
However, now it appears that may be less a case of Apple’s operations wizardry than of weaker-than-expected demand. If that is the case, it would likely be due to Apple’s high price point for the handset, since this has been the most significant iPhone refresh in years.
Ultimately, we won’t find out until Apple announces its next quarterly earnings. It’s also important to note that, whatever sales the iPhone X does, Apple also has the lower cost/lower spec iPhone 8 and 8 Plus to add to sales. If they over-perform, Apple could still pull out an impressive quarter.
Source: CNBC
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
3 responses to “iPhone X demand could be significantly lower than expected”
Analyst, estimates, report, rumors, suggests = BS.
“iPhone X demand could be significantly lower than expected”
With as much respect to “Wall Street” as is due, (something I can’t even chart on a graph from one to two), its collective ANALysts don’t have a •clue• whether expectations of this item or that are too high. If such were the case, Wall Street would make millions, even tens of millions of multi-millionaires who bet their way. No, financial ANALysts simply poke their microsecond-to-microsecond numbers and historical data into complex Excel models, then—often ignoring the results altogether—make their uninformed prognostications.
When the iPhone 4 “antenna-gate” and iPhone 5 “bend-gate” non-issues seemingly gripped the nation enough to even engender SNL sends-ups, they caused little more than temporary blips on Apple’s stock, and its rise to the world’s powerhouse technology company. This most recent ridiculous flap over Apple “crippling iPhones” over battery decline is a perfect example of how silly the press and even users can be. I have even read reports of people believing Apple has imbedded “time bombs” in their phones, which they believe will brick them on a certain date in order to get them to buy a new model.
It’s just too bad that so many of these so-called experts, (including tech blogs like Cult, and •much• more egregiously the irresponsible BGR), put so much emphasis on the iPhone. Since 2008, iPhone has been one big part of the Apple sphere, but certainly not the only one. If Apple truly has decided to reduce manufacture of the iPhone X (not proven), I’m quite sure they did so for reasons other than the idea that it will not be popular. Funny how most people believe Apple is the best technology company on earth, but don’t give it credit for knowing how to manage its own business.
it’s funny that people are completely forgetting that this is just one of new iPhones and no-one talks about 8/8+ which are selling very well too. Overally sales propably going to be very high for Apple. I have a feeling that iPhone sales will be around 85 million.