Falling iPhone Sales Has Apple Investors Spooked

Joanna Estrada
December 27, 2017

An Apple spokeswoman said the company does not comment on market rumours. "We highlight that we do not see 3D sensing or OLED panel order cuts, which are specific components for the iPhone X".

The report, along with some recent brokerage calls on tepid iPhone X demand, made Apple shares sink 2.5 percent, their worst single-day percentage fall since August 10.

Shipments in the first quarter of next year might be as low as 35 million, according to Zhang Bin, a Sinolink Securities Co. analyst. Analysts predict Apple sold as many as 90 million iPhones over the past three months, which would blow away the company's previous record.

In truth, only Apple has any idea as to how iPhone X sales are measuring up this quarter. The drop reflects "weak demand because of the iPhone X's high price point and a lack of interesting innovations", the New York-based research firm said in note to clients Friday. The digital asset gained 14 percent on Tuesday, rising to almost $16,000 on the Bitstamp exchange, after sinking by more than a quarter from Dec 16 to 25.

Given that the iPhone represents about two-thirds of Apple's sales, the company's forecast indicates that it's expecting iPhone growth. Finisar and Skyworks fell by 2%.

Apple has been counting on a redesigned 10th anniversary iPhone to boost shipments as its market value advances towards US$1 trillion (S$1.35 trillion).

Shares in Apple Inc and several of its Asian suppliers fell on Tuesday after a report by Taiwan's Economic Daily and comments from some analysts suggested iPhone X demand could come in below expectations in the first quarter. The Cupertino, Calif.,-based company is facing new challenges from Samsung Electronics Co., which is quickly recovering from the Galaxy Note 7's recall after fires. "The running joke in China. on WeChat and Sina Weibo is that 'Face ID technology is not working perfectly - I had a photo of my favorite star in front of my iPhone X and it unlocked'". Touch-screen maker General Interface Solution Holding plunged 8.4 per cent yesterday after slipping slightly on Monday.

Perhaps Apple could introduce other devices in the future with some of the technology packed inside iPhone X, such as Face ID, and offer it for a lower price, if only to cover a wider price range.

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.

Japan's households spent more than expected in November while consumer inflation ticked up and the jobless rate hit a fresh 24-year low, according to data earlier on Tuesday, offering the nation's central bank some hope an economic recovery will drive up inflation to its 2 percent target.

But Tung said that although the overall sentiment is down, "there could be some upside surprises to iPhone X" in China.

The stock has soared 51 per cent this year, bringing its market value to nearly US$900 billion.

Other reports by Click Lancashire

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