Apple to produce 8M iPhone X units in Q2, trying to 'burn off' existing supply, report say...

Posted:
in iPhone edited April 26
Riding on the back of rumors of disappointing iPhone X sales, dismal supplier guidance and rampant speculation, a report on Thursday claims Apple plans to produce only a limited quantity of units in the second calendar quarter of 2018.

iPhone X


Citing a source within Apple's supply chain, Fast Company reports the company ordered 8 million iPhone X handsets for the current quarter after expressing disappointment over slower than expected sales.

For reference, Apple sold 41 million iPhones over the same period last year.

The report presumes the order is not related to seasonality. Apple commonly draws down iPhone production after the holiday quarter, lowering production as the year progresses toward a refresh typically released in the fall.

According to the supplier source, Apple built "too many" iPhone X units in the quarter ending in December and is now attempting to "burn off" inventory stacked up at partner resellers. Further, the company is now doubting its strategy of releasing a top-tier, $1,000 smartphone amidst a slowdown in global smartphone sales, the person said.

Analysts expected massive demand for iPhone X, an OLED-toting handset that represents Apple's first major iPhone redesign in four cycles. Apple reported a solid performance this past quarter with 77.3 million iPhones sold, including a good mix of high-end iPhone X units that brought collective iPhone ASPs to a record-setting $796.42. The numbers, however, missed Wall Street's mark.

In an earnings conference call, CEO Tim Cook said iPhone X outsold its iPhone 8 and 8 Plus stablemates every week since it launched in November, suggesting the $1,000 flagship was indeed still popular well into the bearish post-holiday season.

More recently, however, reports from the supply chain cast doubt on the pricey handset's performance. In January, before Apple's most recent earnings report was published, Nikkei claimed iPhone X production was cut in half due to sluggish sales. The publication reasserted those claims in February, saying the slowdown left Samsung saddled with excess OLED panel production capacity.

Reports from key Apple suppliers appear to concur with the narrative. Austrian firm AMS, which builds components for Apple's TrueDepth camera, issued guidance this month warning of lower than expected revenue due to a reduction in orders, while A-series chip producer TSMC revised its full-year revenue target down $1 billion due in part to a declining mobile market.

Most recently, Samsung on Wednesday said weak demand experienced by its panel business would negatively impact profitability. Samsung is the sole supplier of OLED panels used in Apple's iPhone X.

With widely circulating rumors of lower than expected iPhone X demand, the handset will inevitably be a topic of discussion when Apple reports earnings for its second fiscal quarter of 2018 next week. CEO Tim Cook is unlikely to provide hard numbers, but he could offer color on overall performance as it pertains to other shipping models.
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Comments

  • Reply 1 of 40
    mercelmercel Posts: 17member
    This is a rehash, recycled hatched job of questionable analyst "notes."  

    Today, we have this:  

    Counterpoint Research: In Q1, Apple grew 32% YoY in China due to strong iPhone X performance

    Commenting on Apple’s performance and opportunity, Associate Director, Tarun Pathak, highlighted, “Apple still holds a large user base in China who haven’t upgraded in the past two years. Apple is now back to YoY growth in the first quarter since Q1 2015, which is an indication that its older generation iPhone user base is now upgrading. This can set the set the tone for the vendor’s full year outlook. Furthermore, as Apple enters its seasonal cycle, promotions in the coming quarters will further drive upgrades.”

    Source: Counterpoint Technology Market Research

    edited April 26 magman1979h2pyojimbo007silvergold84
  • Reply 2 of 40
    How come AI keeps putting this crap in. We don’t want to read rumors from supply chains....
    SnickersMagoomagman1979watto_cobra
  • Reply 3 of 40
    foggyhillfoggyhill Posts: 4,751member
    All I see here is 7 days till they announce results and trying to drop the stock.

    Yet, they're so "desperate" that there is no change in pricing... Pure shit at all levels.

    Want to see desperate, look at the S9's price right now.
    edited April 26 chasmmagman1979yojimbo007watto_cobra
  • Reply 4 of 40
    Do some Product RED iPhone X!
    watto_cobra
  • Reply 5 of 40
    Cue iPhoneX fan boys in protest.  
  • Reply 6 of 40
    I got the iPhone X because I have a condition that make my fingers shack just enough that Touch ID hardly ever worked. I love Face ID but the phone is way overpriced for what it is. Personally the price has cured me of wanting to do upgrades every year. Don't see myself upgrading next year. Honestly I can't think of another feature they could add other than super long battery that would get me to spend money again without my phone dying. In many ways Apple has jumped the shark for me. Sure the products are good but they have hit a price point that I am just not willing to pay for many parts of the product line. I can afford them but see it as not being worth the investment.
    larryadick applebaumGeorgeBMacSnickersMagootokyojimuaegean
  • Reply 7 of 40
    JFC_PAJFC_PA Posts: 198member
    My X costs an extra $8 per month with Apple financing. Versus my service costs that’s a rounding error. 

    Oh and its a terrific improvement over my 7
    Plus. Imho, of course. 
    edited April 26 StrangeDaysmagman1979h2pwatto_cobra
  • Reply 8 of 40
    wizard69wizard69 Posts: 12,550member
    Frankly I'm not surprised one bit.   The OLED screen is not a draw people think it is.   IPhone X simply costs too much!   Too much by $250.    Apple needs to pull head from behind before they loose everything.    I really don't see how people can justify the cost of IPhone X considering the limited advantages over the 8 series.

    By the way FaceID isn't a big issue cost wise, HP Envy does basically the same thing in a $700 laptop.


    edited April 26 feudalist
  • Reply 9 of 40
    qwweraqwwera Posts: 237member
    The main problem for me is that's it's both too small and too big. I found i either want an SE size or a plus size. This size is the worst of all worlds.
  • Reply 10 of 40
    zonezone Posts: 53member
    Apple can do no right. Amazon can do no wrong. Amazon profits are nothing compared to Apples and they are rewarded with 11%+ in stock. I bet ya they are trying to drop Apple so Amazon can be in the #1 stop for a few days. Typically and Apple will have the great numbers and make a massive profit BUT won't be good enough. Blah, Blah. Blah...
    StrangeDaysmagman1979h2pwatto_cobra
  • Reply 11 of 40
    foggyhill said:
    All I see here is 7 days till they announce results and trying to drop the stock.

    Yet, they're so "desperate" that there is no change in pricing... Pure shit at all levels.

    Want to see desperate, look at the S9's price right now.
    Seems to me there is an alternation for an overstock of Samsung OLED displays. 

    What if, and this is more consistent with Tim Cook’s comments during Apple’s last earnings conference call, Samsung’s overstock situation was caused by iPhone X selling SO WELL, that Galaxy sales went way down?

    Consider that iPhone ASP could not increase by nearly $100 without very strong sales of the iPhone X.  It’s mathmatically impossible to have one without the other. 

    i think this narrative is much more likely than those being regurgitated every day by a media, purporting to be knowledgeable, that in reality hasn’t a clue about iPhone X unit sales.  
    berndogtmaymagman1979watto_cobra
  • Reply 12 of 40
    mike54mike54 Posts: 253member
    The cheapest iPhone X in this country is $1580 (the other is $1830 !) which is very expensive. It is not selling nowhere near as well as they hoped.
    It's a nice phone alright, but its priced left-right-out and unless people have excess money, its a no go as there is the cheaper iPhone 8 option which starts from $1080 here ( 4.7in, although it only has 2gb ram as opposed to 3gb).
    h2p
  • Reply 13 of 40
    rogifan_newrogifan_new Posts: 3,216member
    Amazon stock up 7% after hours because of better than expected earnings. Won’t be long before Amazon is the most valuable company by market cap. I have a feeling Apple’s earnings & guidance won’t be great and the stock will tank. Hope I’m wrong.
  • Reply 14 of 40
    “A source within Apple’s supply chain” talking to FastCompany… maybe I’m crazy but I’ll call bullshit and wait to be proven wrong. :tongue: 

    edited April 26 magman1979watto_cobra
  • Reply 15 of 40
    mike54 said:
    The cheapest iPhone X in this country is $1580 (the other is $1830 !) which is very expensive. It is not selling nowhere near as well as they hoped.
    It's a nice phone alright, but its priced left-right-out and unless people have excess money, its a no go as there is the cheaper iPhone 8 option which starts from $1080 here ( 4.7in, although it only has 2gb ram as opposed to 3gb).
    Where is here and how much is your VAT?
    watto_cobra
  • Reply 16 of 40
    nunzynunzy Posts: 662member
    We can believe in Apple or we can believe people who lie for a living. I know who I believe in.
    StrangeDaysmagman1979watto_cobra
  • Reply 17 of 40
    They're going to dig a whole in the ground next to Ataris E.T. and make the overstock disappear.
    king editor the grate
  • Reply 18 of 40
    Rayz2016Rayz2016 Posts: 4,160member
    Kuyangkoh said:
    How come AI keeps putting this crap in. We don’t want to read rumors from supply chains....
    Because AI lives and dies by page clicks. 

    I wonder how iMore survives. The writing is better (articles rather than just rehashing), but they have far fewer stories. Maybe it’s just a quality over quantity thing. 
    IreneW
  • Reply 19 of 40
    sflocalsflocal Posts: 4,239member
    Kuyangkoh said:
    How come AI keeps putting this crap in. We don’t want to read rumors from supply chains....
    Click
    Bait
    StrangeDaysmagman1979
  • Reply 20 of 40
    I have seen 10 iPhone Xs in my neighborhood while I saw 0 S9 , S8 & S7 
    So this must mean ,the Galaxy series is a flop
    magman1979h2psilvergold84watto_cobra
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