iPhone XR sales estimates slashed by Ming-Chi Kuo, as trade war headwinds swirl

Posted:
in iPhone edited November 2018
Ming-Chi Kuo has cut expectations for sales of the iPhone XR for the next year by 30 percent to 70 million, based on a possibility of a trade war with China, and other factors possibly weighing on sales, very similar to his erroneous predictions of iPhone X volumes.

Blue iPhone XR and white HomePod
Blue iPhone XR and white HomePod


In a note to investors seen by AppleInsider Ming-Chi Kuo of TF Securities has advised investors that there are three factors that are holding down iPhone XR demand world-wide. The first, blanket, reason is the negative impact on consumer confidence that a possible trade war could have, particularly in the Chinese market.

Also cited by Kuo is the possibility that customers are waiting for the iPhone XR feature set to become more affordable in another year with added feature boosts, like even smaller bezels and a dual-camera system in that pricing level. Competition from Huawei's Mate 20 series is also cited, but in passing as a third factor.

TF Securities has reduced iPhone XR shipment estimations for the fourth calendar quarter of 2018 by about 35 percent, and the first quarter of 2019 plus the second quarter of 2019 by about 30 percent each.

Kuo believes that "legacy" iPhone shipments will increase significantly thanks to "more affordable prices." Kuo isn't cutting estimates of unit sales for the holiday quarter, though, and is expecting between 75 million and 80 million units sold.

The net effect of the iPhone XR demand, however, will result in a year-over-year decline in the first calendar quarter of 2019, if Kuo is correct.

Kuo has said this before about the iPhone X in early 2018, and wasn't accurate. His voice joined a chorus of analysts predicting poor sales of the device, and lower earnings than Apple actually delivered as a result.

In October, Kuo predicted that demand for Apple's iPhone XR will be better than expected, with Apple cranking out about 38 million of them in time for holiday sales. He said then that the iPhone XR should defeat a "low seasonality" after the holiday quarter. Instead of a near-50 percent drop that the iPhone 8 saw after the holiday, the iPhone XR is expected to only drop 30 percent, a favorable comparison to the overall industry's about 40 percent drop.

Kuo joins other analysts who are pessimistic about Apple's future because of decreasing iPhone demand. However, Jun Zhang from Rosenblatt, and Bank Of America Merrill Lynch seem more concerned that Apple isn't going to report sales figures for the iPhone going forward, more than any other realistic concern.

A cheaper alternative to the iPhone XS and XS Max, the iPhone XR has a 6.1-inch LCD Liquid Retina display instead of an OLED panel used by its stablemates, has a single 12-megapixel wide-angle camera on the rear, and a wide array of bright color options. Preorders begin on October 19, with the first units arriving on October 26.
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Comments

  • Reply 1 of 27
    When I think about it. Apple has good reason to not report unit sales. We have a President that is unpredictable and is hell bent on escalating a trade war with China. Apple is much better served by focusing on increasing their profit margins and the expanding their services business, because their supply or demand can be artificially impacted by national policies out of their control without warning, mid quarter. If they proceed with caution but things stabilize, they will just be that more successful. 

    n2itivguywatto_cobrajony0
  • Reply 2 of 27
    larryalarrya Posts: 533member
    I’ve had mine for a week. I have very long fingers and can deal with the size, but I think many more would sell if this phone were smaller and lighter.  However, the LCD display’s bezels probably dictated this size in order to keep the bezel/body ratio in an acceptable range. 
    watto_cobra
  • Reply 3 of 27
    tzeshantzeshan Posts: 1,847member
    It looks the macro economy is finally catching up with Apple this time. There are so many headwinds that AAPL could easily fall into bear market for quite some time. It is sad that Apple lost Save Jobs. The last time before world fell into recession due to macro economy in 2008, Steve Jobs unveiled iPhone in 2007. iPhone sales took off in 2009 mainly due to the world economy is recovering. This time the President began to destroy world economy in March 2018. And Apple does not have a Steve Jobs to waddle through the looming world economic collapse. 
  • Reply 4 of 27
    lkrupplkrupp Posts: 6,530member
    AAPL is being trashed to day along with all of the other FAANG stocks so don't try to justify your bias with its dropping. Wall Street is a strange universe where fear and greed rule, not logic and reasoning. 
    edited November 2018 Rayz2016MisterKitmacplusplusStrangeDayswatto_cobra
  • Reply 5 of 27
    My take on this year's phones from Apple is that they are crackerjack, but the release day and date availability of them from my local Apple Store (all versions were available) suggests to me at least probably slower sales. If Apple can knock it out of the ballpark with their VR goggles - which appears to be the only major new device they're likely to ship in the near future, they should be OK. Raising prices to offset slower sales seems to me a shortsighted policy.
  • Reply 6 of 27
    tzeshantzeshan Posts: 1,847member
    larrya said:
    I’ve had mine for a week. I have very long fingers and can deal with the size, but I think many more would sell if this phone were smaller and lighter.  However, the LCD display’s bezels probably dictated this size in order to keep the bezel/body ratio in an acceptable range. 
    I think with all the new features iPhones accumulated over the years, it is becoming extremely difficult or nearly impossible to fit the features in an iPhone 4 size. Maybe Steve Jobs can force Apple engineers to do it but not the nice person like Cook. 
  • Reply 7 of 27
    lkrupp said:
    AAPL is being trashed to day along with all of the other FAANG stocks so don't try to justify your bias with its dropping. Wall Street is a strange universe where fear and greed rule, not logic and reasoning. 
    What makes you think that greed and fear are not based on logic and reasoning!?
    muthuk_vanalingam
  • Reply 8 of 27
    OMG, isn’t this rehashed news from last year? The only thing these kinds of rumors will do is effect the price of the stock, I guess it’s a good time to pick some up (I’m not an investment advisor and am definitely NOT suggesting you do this without due diligence). With all the new products available for people to buy and with Christmas buying season right around the corner, how is this not going to be a boon for Apple? 
    edited November 2018 watto_cobra
  • Reply 9 of 27
    lkrupp said:
    AAPL is being trashed to day along with all of the other FAANG stocks so don't try to justify your bias with its dropping. Wall Street is a strange universe where fear and greed rule, not logic and reasoning. 
    You can say that again.
    watto_cobra
  • Reply 10 of 27
    NY1822NY1822 Posts: 561member
    Once the stock fills the gap around 192-193, the reports will change...same story...His reasons could have been the same last month but he is playing both sides of the fence.
    watto_cobra
  • Reply 11 of 27
    tzeshan said:
    larrya said:
    I’ve had mine for a week. I have very long fingers and can deal with the size, but I think many more would sell if this phone were smaller and lighter.  However, the LCD display’s bezels probably dictated this size in order to keep the bezel/body ratio in an acceptable range. 
    I think with all the new features iPhones accumulated over the years, it is becoming extremely difficult or nearly impossible to fit the features in an iPhone 4 size. Maybe Steve Jobs can force Apple engineers to do it but not the nice person like Cook. 
    That is such a comical false idea of how hardware and electrical engineering works. 
    edited November 2018 AppleExposedfastasleepwatto_cobraairnerd
  • Reply 12 of 27

    lkrupp said:
    AAPL is being trashed to day along with all of the other FAANG stocks so don't try to justify your bias with its dropping. Wall Street is a strange universe where fear and greed rule, not logic and reasoning. 
    What makes you think that greed and fear are not based on logic and reasoning!?
    Greed and fear are emotions, therefore logic and reasoning are not required. Have you not heard of the Tragedy of the Commons? Greed is often counter-logical.
  • Reply 13 of 27

    lkrupp said:
    AAPL is being trashed to day along with all of the other FAANG stocks so don't try to justify your bias with its dropping. Wall Street is a strange universe where fear and greed rule, not logic and reasoning. 
    What makes you think that greed and fear are not based on logic and reasoning!?
    Greed and fear are emotions, therefore logic and reasoning are not required. Have you not heard of the Tragedy of the Commons? Greed is often counter-logical.
    I didn't say that they are necessary conditions.

    I was stating a simple fact that 'greed' (often used as short-hand for 'people prefer more wealth to less') and 'fear' (often used as short-hand for 'people prefer less risk to more') are not all inconsistent with applying logic or reasoning to a financial situation. They can be, and are often, associated. Just as emotions are not necessarily disassociated with cognition. In fact, they often motivate it.

    And, the Tragedy of the Commons is easily enough solved, at least in principle: put a price on the enjoyment of the Commons (i.e., get people to internalize the externality).
    edited November 2018
  • Reply 14 of 27
    lkrupplkrupp Posts: 6,530member
    lkrupp said:
    AAPL is being trashed to day along with all of the other FAANG stocks so don't try to justify your bias with its dropping. Wall Street is a strange universe where fear and greed rule, not logic and reasoning. 
    What makes you think that greed and fear are not based on logic and reasoning!?
    Because for every doom and gloom prediction there is a corresponding unicorn and rainbows prediction. Because it was demonstrated that a monkey throwing a dart at a stock chart was just as good at predicting a winner as any seasoned analyst. With Apple stopping unit sales reports it now becomes even easier for trolls and analysts to invent any sales scenario they want based upon their biases and there will be no hard data to contradict them. When the quarterly report shows increased revenue, increased ASP and increased profits from Apple those same people can pull anything out of their asses to explain it.
    watto_cobra
  • Reply 15 of 27
    lkrupp said:
    AAPL is being trashed to day along with all of the other FAANG stocks so don't try to justify your bias with its dropping. Wall Street is a strange universe where fear and greed rule, not logic and reasoning. 
    What makes you think that greed and fear are not based on logic and reasoning!?
    Warren Buffett says they aren’t. I don’t know, but he seems to know more about Wall Street than anyone alive, having worked there for Ben Graham who himself ran his fund back from well before the Great Depression. 

    They explain it to those interested using the Mr Market parable.

    https://fs.blog/2013/11/mr-market/


    watto_cobraadamc
  • Reply 16 of 27
    AppleExposedAppleExposed Posts: 211unconfirmed, member
    My take on this year's phones from Apple is that they are crackerjack, but the release day and date availability of them from my local Apple Store (all versions were available) suggests to me at least probably slower sales. If Apple can knock it out of the ballpark with their VR goggles - which appears to be the only major new device they're likely to ship in the near future, they should be OK. Raising prices to offset slower sales seems to me a shortsighted policy.
    iPhone sales aren't slowing.

    kruegdude said:
    OMG, isn’t this rehashed news from last year? The only thing these kinds of rumors will do is effect the price of the stock, I guess it’s a good time to pick some up (I’m not an investment advisor and am definitely NOT suggesting you do this without due diligence). With all the new products available for people to buy and with Christmas buying season right around the corner, how is this not going to be a boon for Apple? 

    It's rehashed news from iPhone 5c!
    watto_cobra
  • Reply 17 of 27
    dennis james5dennis james5 Posts: 1unconfirmed, member
    The reason of low sales is obvious: knowing Apple users, they don't want to be seen with the cheaper iPhone of the bunch. And the single back camera really makes it quite visible :)
    edited November 2018 SpamSandwichpalomine
  • Reply 18 of 27
    My take on this year's phones from Apple is that they are crackerjack, but the release day and date availability of them from my local Apple Store (all versions were available) suggests to me at least probably slower sales. If Apple can knock it out of the ballpark with their VR goggles - which appears to be the only major new device they're likely to ship in the near future, they should be OK. Raising prices to offset slower sales seems to me a shortsighted policy.
    I can't see very many consumers buying any sort of goggles after the poor sales of 3D TVs that came with 3D glasses. I don't think many consumers want to be wearing any bulky crap on their faces. Families would have to have multiple sets of goggles for viewing content. I know I'm basically speaking for myself, but I can't see any goggles having much of a future for daily consumer use. AR doesn't seem to be catching on so VR goggle use seems more unlikely, to me.
  • Reply 19 of 27
    NY1822 said:
    Once the stock fills the gap around 192-193, the reports will change...same story...His reasons could have been the same last month but he is playing both sides of the fence.
    Just when I started to believe Apple stock has strength, the stock ends up being the weakest of all FANGs and even Microsoft. Apple stock has been solidaly kicked in the nuts, once again. Only Apple's stock buybacks during these times are keeping me from being rather disappointed. I can only shake my head at how weak Apple stock remains.
  • Reply 20 of 27
    My take on this year's phones from Apple is that they are crackerjack, but the release day and date availability of them from my local Apple Store (all versions were available) suggests to me at least probably slower sales. If Apple can knock it out of the ballpark with their VR goggles - which appears to be the only major new device they're likely to ship in the near future, they should be OK. Raising prices to offset slower sales seems to me a shortsighted policy.
    I can't see very many consumers buying any sort of goggles after the poor sales of 3D TVs that came with 3D glasses. I don't think many consumers want to be wearing any bulky crap on their faces. Families would have to have multiple sets of goggles for viewing content. I know I'm basically speaking for myself, but I can't see any goggles having much of a future for daily consumer use. AR doesn't seem to be catching on so VR goggle use seems more unlikely, to me.
    If you’re comparing VR to a family watching 3D movies on a tv together, it’s pretty clear you don’t understand the technology. 
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