USA TODAY International Edition
Apple shares take a hit on iPhone X sales projections
Apple heads into the new year with some unusually downbeat news: Its new iPhone X isn’t proving to be quite the sales darling some of its previous smartphones have been.
Shares of the Cupertino, Calif., tech giant closed down 2.5% to $170.57 in trading Tuesday after several market analysts forecast lower-than-expected demand for the latest iPhone, with its edge-to-edge screen, face-recognition software and lofty price. For the year, Apple shares are up 45%.
Apple could cut its sales forecast for the first quarter of 2018 to 30 million units, down from an initial target of 50 million, according to a report in Taiwan’s Economic Daily News that was cited by Reuters.
Similar reports cited the high price of the iPhone X, released last month and featuring a base price of $999, as a reason for lower demand and lower shipments. A number of other Apple-watchers echoed that downbeat forecast.
In the current October-December quarter, shipments were estimated to be down to 25 million from an expected 30 million, JL Warren Capital said in a report released Friday that was cited by Bloomberg. The New York-based equity firm, which focuses on Chinese companies, based its estimate on lower orders placed at Apple’s suppliers.
Declining demand could carry over into the first quarter of 2018 after holiday buying slows, Beijing-based Sinolink Securities Co. says. Bloomberg cited its estimate, out Monday, that shipments of Apple’s iPhone X during the first quarter of 2018 could be as low as 35 million, “or 10 million less than previously expected.”
This clamor a few weeks after a new iPhone model hits isn’t new. “Apple’s famously noisy supply chain typically begins squawking around the end of December and beginning of January,” Nomura Instinet equity research analyst Jeffrey Kvaal said in a note to investors Dec. 19. He downgraded Apple shares from a “buy” rating to “neutral.”
Shares of Apple fell after the release of iPhone 5 and iPhone 6, he noted. However, shares “obviously recovered,” Kvaal said.
Apple’s shipment delays of iPhone X models had decreased last week to one day in the U.S., Kvaal says, which suggests “limited upside” to sales expectations. Apple has not released shipment forecasts and declined comment on the forecasts.
Not all analysts agreed that 2018 won’t prove successful for Apple. The iPhone X adoption rate in China is ahead of iPhone 8 and 8 Plus, noted Morgan Stanley analyst Katy Huberty, who maintained a $200 price target on Apple stock in a note Dec. 21.
Rosenblatt Securities said the iPhone X has had stable sales in North America and has outsold the 8 and 8 Plus combined, according to StreetInsider.com. Rosenblatt analyst Jun Zhang said the Taiwanese media reports could be referring to production cuts in iPhone 8 and 8 Plus models.