Tech titan sinks as report indicates weak iPhone 8 demand

Pre-order volumes in the U.S. fell below those for previous 2 models, analyst says

Apple Inc. shares fell the most in more than a month after an analyst said demand for the iPhone 8 is “substantially lower” than for earlier models of the world’s best-selling smartphone.

Pre-order volumes in the U.S. for the iPhone 8 fell below those for the iPhone 7 and iPhone 6, Rosenblatt Securities analyst Jun Zhang said in a note to clients. Demand in China is even lower, the analyst said. Zhang has a neutral rating on Apple shares.

Consumers pre-ordered about 1.5 million handsets on Chinese retail website JD.com in the first three days, compared with about 3.5 million for the comparable period of iPhone 7 orders, Zhang said.

The stock fell as much as 3.1 per cent, the most since Aug. 10. It closed down 1.7 per cent to US$156.07 in New York.

The iPhone 8 was unveiled last week alongside the iPhone X, which incorporates many more new features.

While the 8 becomes available in stores on Sept. 22 for upwards of US$699, the iPhone X will not be available until November and will cost at least US$999. The topof-the-range model includes a facial recognition system that uses a 3D scanner to unlock the handset, replacing the fingerprint sensor in the iPhone 8 and other earlier models.

“We understand this does not reflect the iPhone 8 cycle as a whole since the iPhone X has not yet officially launched, but we are concerned,” Rosenblatt’s Zhang said in the note. iPhone 8 production might need to be reduced and “the iPhone X production ramp might not be able to meet demand in December and March quarters,” Zhang said.

Apple forecast sales of between US$49 billion and US$52 billion in the three months through September, a projection investors understood to signal resilient iPhone demand.

The later release date of the iPhone X had already been taken into account when the company made that forecast in August, spokeswoman Kristin Huguet said last week.

Apple also acknowledged a problem with its new Apple Watch Series 3, which hits stores on Friday and features its own cellular connection for the first time.

Some reviewers found that when the device connects to Wi-Fi networks requiring further authentication, the cellular service sometimes drops.

Apple said it is “investigating a fix for a future software release.”

Wednesday ’s share decline pared gains this year to about 35 per cent, valuing Apple at US$805 billion.