Apple suppliers drop on report of weak iPhone X demand; analysts' views mixed

Genius Electronic Optical

26/12/2017 10:32

By Cate Cadell 
    BEIJING, Dec 26 (Reuters) - Shares in several of Apple Inc's 
 AAPL.O  Asian suppliers fell for a second straight day on 
Tuesday, hurt by a report from  Taiwan's Economic Daily and some 
analysts saying that iPhone X demand could come in below 
expectations in the first quarter. 
    Apple will slash its sales forecast for the iPhone X in the 
quarter to 30 million units, the Taiwanese newspaper said on 
Monday, citing unidentified sources - down from what it said was 
an initial plan of 50 million units. 
    Apple has not publicly disclosed quarterly sales targets for 
the iPhone X, which went on sale in November. 
    Some analysts have also flagged disappointing demand. 
U.S.-based JL Warren Capital is predicting shipments of just 25 
million units as consumers baulk at the "high price point and a 
lack of interesting innovations".  
    Chinese broker Sinolink Securities said it expects the 
model's price would dampen consumer enthusiasm for the product, 
adding that slow production rates could also hinder sales. 
    But others were more bullish. 
    "Our work continues to suggest the March and June quarters 
will have a significant amount of iPhone X make-up shipments," 
Chicago-based Loop Capital said in a note last week, forecasting 
shipments of 40-45 million units in the first quarter of 2018, 
up from an estimated 30-35 million units in the current quarter. 
    Analysts at Jefferies have also forecast around 40 million 
iPhone X sales for the first quarter. 
    An Apple spokeswoman said the company does not comment on 
market rumors. During a trip to China this month Apple CEO Tim 
Cook said he "couldn't be happier" with the demand for the 
iPhone X in the country.  urn:newsml:reuters.com:*:nL3N1O62MV 
    Apple suppliers that were most hit included Genius 
Electronic Optical Co Ltd  3406.TW  which dropped 2.4 percent on 
Tuesday to take its losses this week to 11.4 percent. Pegatron 
Corp  4938.TW  also fell on both days, losing 3.2 percent this 
week. 
    But falls for Foxconn, one of Apple's main suppliers  
formally known as Hon Hai Precision Industry Co Ltd  2317.TW , 
were milder and it has lost only 1.8 percent over the two days. 
    A Reuters analysis of Chinese social media shows that 
interest in the iPhone X - which spiked around its launch - has 
not kept pace with the highly popular iPhone 6 released in 2014, 
which helped then drive massive sales for Apple in China. 
    There were only 4.97 million Weibo posts mentioning the 
iPhone X so far in December compared to over 11 million for the 
iPhone 6 in the equivalent period in 2014, the analysis showed. 
    Apple's stock has risen over 50 percent in 2017 and is 
currently valued at just under $900 billion. 
 
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China's iPhone X demand    http://reut.rs/2zx1BDk 
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 (Reporting by Cate Cadell; Additional reporting by Adam 
Jourdan; Editing by Edwina Gibbs) 
 ((Cate.Cadell@thomsonreuters.com; +8618510722863;)) 
 
Keywords: APPLE IPHONE/