Apple Inc. looks like it’s having a not-so Merry Christmas.
Analysts lowered iPhone X shipment projections for the first quarter of next year, citing signs of lackluster demand at the end of the holiday shopping season, and the company’s shares fell Tuesday along with those of some suppliers.
Sinolink Securities Co. analyst Zhang Bin said in a report Monday 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 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 York-based research firm said in note to clients Friday.
"Bad news here is that highly publicized and promoted X did not boost the global demand for iPhone X," according to the note.
The shares fell 2.7 percent to $170.30 in early trading in New York Tuesday. U.S.-based suppliers like Lumentum Holdings Inc., Cirrus Logic Inc. and Broadcom Ltd. also tumbled.
Apple has been counting on a redesigned 10th anniversary iPhone to boost shipments as its market value advances toward $1 trillion. The Cupertino, California-based company is facing new challenges from Samsung Electronics Co., 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.
Taiwan Report
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 Co.’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 Co., Shenzhen Desay Battery Technology Co. and Largan Precision Co. fell Monday on the report. Lens recovered some of the losses on Tuesday, while Largan continued to slide. Shenzhen Desay was little changed.