Apple’s high-priced iPhone X looks like missing target
Apple looks like it’s having a not-so Merry Christmas.
Analysts have lowered iPhone X shipment projections for the first quarter of next year, citing signs of lacklustre demand at the end of the holiday shopping season.
Sinolink Securities analyst Zhang Bin said in a report this week that handset shipments in the period may be as low as 35 million, or 10 million less than he previously estimated.
“After the first wave of demand has been fulfilled, the market now worries that the high price of the New Zealand investment groups will dominate rural property purchases. “Overseas buyers will chase urban assets instead, mostly due to the attractive returns, but also partly due to Overseas Investment Act restrictions on rural land purchases of 5ha or more,” Colliers’ forecast said. Extra office supply in Auckland and Wellington won’t dent strong capital value and rental increases. “Syndicators and overseas funds will continue to be the dominant buyers of substantial city centre properties, as domestic institutions find it hard to justify buying at current price levels.” The high level of confidence shown by industrial property investors in 2017 will prove to be justified. “Investors can expect more rental rises and steady iPhone X may weaken demand in the first quarter,” Zhang wrote.
JL Warren Capital LLC said shipments will drop to 25 million units in the first quarter of 2018 from 30 million units in the fourth quarter, citing reduced orders at some Apple suppliers. The drop reflects “weak demand because of the iPhone X’s high price point and a lack of interesting innovations,” the New Yorkbased research firm said. “Bad news here is that highly publicised and promoted X did not boost the global demand for iPhone X.” [already very low] yields, particularly in the main centres,” Colliers said.
Increasing online retail activity will boost demand for warehousing from retail logistics providers. “This will be aided by continuing low fuel prices. In Auckland, a regional fuel tax will concentrate demand close to arterial roads,” the agency said.
Increasing staff costs and lower immigration will begin to prey on the minds of retailers. “[Particularly those] in the food and beverage sector. However, the lag effect of these measures and continued positive consumer confidence will defer any negative effects beyond 2018, while robust tourism growth will counteract these effects in tourist hotspots,” Colliers said.
In a year, the national median house price will be higher than it is now. “Downside protection will be provided by base demand, which
remains robust.”
Apple has been counting on a redesigned 10th anniversary iPhone to boost shipments as its market value advances toward US$1 trillion ($1.42t). The Cupertino, Californiabased company is facing new challenges from Samsung Electronics, which is quickly recovering from the Galaxy Note 7’s recall after fires. In the meantime, Chinese brands such as Huawei, Oppo and Xiaomi are also luring away potential customers in China and other emerging markets such as India.
Apple is said to have trimmed its first-quarter sales forecast to 30 million units from 50 million, Taiwanese newspaper Economic Daily News reported, citing unidentified supply chain officials. It also said Hon Hai Precision Industry’s main iPhone X manufacturing hub in Zhengzhou, China, stopped recruiting workers. The company, also known as Foxconn, is the sole iPhone X assembler, and also makes the handsets in Shenzhen and Chengdu.
Shares of Asian suppliers, such as Lens Technology, Shenzhen Desay Battery Technology and Largan Pre- cision fell on the report. An Apple representative declined to comment. Foxconn said company policy prevents it from commenting on such matters.
Apple received a rare downgrade last week from Nomura Instinet analyst Jeffrey Kvaal, who said iPhone X sales as well as other positive factors are already baked into the stock price. He lowered his rating to “neutral” from “buy”.
The stock has soared 51 per cent this year, bringing its market value to almost US$900 billion.