Menu
Investor concern as Apple halves quarterly iPhone X production target

Investor concern as Apple halves quarterly iPhone X production target

Growing concerns around weak sales of the $999 phone, making investors jittery about the company's financial outlook

Apple will halve its iPhone X production target for the first three months of the year to around 20 million units, Nikkei reported on Monday, sending its shares down more than two per cent in early trading.

The report added to growing concerns around weak sales of the $999 phone, making investors jittery about the company's financial outlook when it reports first-quarter results on Thursday.

Apple shares fell to their lowest level in 2018 on Monday, knocking off $14 billion from the company's market value.

"Apple earnings should handily beat December quarter expectations, but March guidance could moderately disappoint," UBS analysts said.

The production cut was prompted by slower-than-expected sales in the holiday shopping season in Europe, the United States and China, the Japanese newspaper reported, without citing a source.

IPhone X was the first phone to sport a new design since the launch of iPhone 6 in 2015 and many expected it to lead to blockbuster sales, dubbed by Wall Street analysts as "super-cycle".

"This was supposed to be the super-cycle year and if Apple hasn't been able to drive substantial unit growth this year, then that makes you little cautious on future iPhone cycles," Atlantic Equities analyst James Cordwell said.

Several analysts have lowered their estimates for iPhone X shipments in the past few weeks, citing high price of the device among other factors, with at least three downgrading their rating on the stock.

Adding to the concerns, Verizon Communications said last week their post-paid device activations were lower than last year as people were keeping phones longer.

A survey of people planning to buy the iPhone showed that the percentage of them looking to buy the iPhone X has dropped to 37 per cent from 43 per cent in an earlier survey, UBS analysts wrote in a note on Monday.

The iPhone X, which features an edge-to-edge display and facial recognition technology to unlock the phone, went on sale in November in the United States.

Asian supply chain checks suggest that iPhone X orders have been weakening recently, with first-quarter production likely to be about 20 million units, JP Morgan analyst wrote in a note dated 24 January.

Quite a few of Apple's iPhone parts suppliers are based in Asia. Shares of Foxconn, one of Apple's main suppliers and formally known as Hon Hai Precision Industry, fell 0.7 per cent on Monday.

Canaccord Genuity analysts have lowered their second-quarter iPhone shipment estimates to 59.9 million units from 66 million units, citing their own survey.

"Our survey work indicates iPhone X sales were strong during the December quarter but sales appear slower in January, more in line with normal seasonal trends," they wrote in a note.

Apple was not immediately available for comment.

Shares of U.S.-listed Apple suppliers such as Micron Technology edged lower following the report.

(Reporting by Muvija M in Bengaluru; Editing by Saumyadeb Chakrabarty)


Follow Us

Join the newsletter!

Or
Error: Please check your email address.

Tags AppleiPhoneiPhone X

Featured

Slideshows

Bumper channel crowd kicks off first After Hours of 2018

Bumper channel crowd kicks off first After Hours of 2018

After Hours made a welcome return to the channel social calendar with a bumper crowd of partners, distributors and vendors descending on The Jefferson in Auckland to kick-start 2018. Photos by Gino Demeer.

Bumper channel crowd kicks off first After Hours of 2018
Looking back at the top 15 M&A deals in NZ during 2017

Looking back at the top 15 M&A deals in NZ during 2017

In 2017, merger and acquisitions fever reached new heights in New Zealand, with a host of big name deals dominating the headlines. Reseller News recaps the most important transactions of the Kiwi channel during the past 12 months.

Looking back at the top 15 M&A deals in NZ during 2017
Kiwi channel closes 2017 with After Hours

Kiwi channel closes 2017 with After Hours

The channel in New Zealand came together to celebrate the close of 2017, as the final After Hours played out in front of a bumper Auckland crowd.

Kiwi channel closes 2017 with After Hours
Show Comments