Apple, suppliers drop on report of weak iPhone X demand (updated)

Genius Electronic Optical

26/12/2017 22:12

(Adds analyst comments on iPhone demand) 
    By Cate Cadell and Paresh Dave 
    BEIJING/SAN FRANCISCO, Dec 26 (Reuters) - Shares in Apple 
Inc  AAPL.O  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. 
    Apple will slash its sales forecast for the iPhone X in the 
quarter to 30 million units, the 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 at a base price of 
$999 in the United States. An Apple spokeswoman said the company 
does not comment on market rumors.  
    Shares of Apple surged 45 percent this year before the 
iPhone X launch as investors anticipated interest from iPhone 
users who had gone years since buying a new one.  
    But financial analysts have mixed views on whether such 
demand has materialized for the premium device, which features 
an edge-to-edge display and facial recognition technology to 
unlock the phone.  
    Shares of Apple have edged slightly lower since the iPhone X 
debut. They fell 2.5 percent to $170.57 on Tuesday. 
    During a trip to China this month Apple Chief Executive Tim 
Cook said he "couldn't be happier" with the demand for the 
iPhone X in the country. The company also had described 
pre-orders for iPhone X as "off the charts."  urn:newsml:reuters.com:*:nL3N1O62MV  
     
    VARYING ESTIMATES  
    Estimates of how many of the new phones Apple is making, and 
how many it will sell, vary widely.  
    At the low end, U.S.-based JL Warren Capital expects Apple 
to ship 25 million iPhone X units as consumers baulk at the 
"high price" and "lack of interesting innovations."  
    On the high end, Chicago-based Loop Capital estimated in a 
note last week 40 million to 45 million first-quarter shipments. 
Jefferies forecast about 40 million first-quarter sales.  
    The iPhone X shares parts with the iPhone 8, and the latest 
report of Asian suppliers cutting production likely has more to 
do with the earlier model, said Jun Zhang, an analyst at 
Rosenblatt Securities. He repeated his first-quarter production 
estimate of 35 million units for the iPhone X. 
    Zhang and other analysts have said mid-range smartphone 
buyers are holding onto their handsets longer, leaving the 
iPhone 8 with weaker sales than the iPhone 7 and X.  
    Apple suppliers taking the biggest hits to their stock 
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  lost 3.2 percent this 
week. 
    Foxconn, one of Apple's main suppliers  formally known as 
Hon Hai Precision Industry Co Ltd  2317.TW , lost a smaller 1.8 
percent this week. 
    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. 
 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
China's iPhone X demand    http://reut.rs/2zx1BDk 
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 (Reporting by Cate Cadell in Beijing and Paresh Dave in San 
Francisco; Additional reporting by Adam Jourdan; Editing by 
Edwina Gibbs and Bill Rigby) 
 ((Cate.Cadell@thomsonreuters.com; +8618510722863;)) 
 
Keywords: APPLE IPHONE/