iPhone production unfazed by injunctions, predictions of bad holiday quarter in doubt

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in iPhone
Apple's iPhone production appears to be rolling largely unhindered into the first quarter of 2019, unfazed by sales injunctions and other factors, although the company is still projected to ship fewer iPhones in 2019 than it did in 2018.

Apple iPhone XR


The recent injunction has had "negligible impact to the supply chain thus far," Cowen research analysts said in a memo seen by AppleInsider. Qualcomm recently secured a ban on some older iPhones for patent violations, but those models are expected to account for just 25 percent of manufactured units in the current quarter. Apple has also issued a software update to skirt the problem, even as Qualcomm has sought to extend the injunction to the iPhone XS and XR lines.

Apple is believed to have adjusted its mix in the December quarter, favoring the iPhone XR and iPhone XS Max. Based on this assumption, Cowen has upped its combined estimate for those phones by 1.5 million, contributing to 73.5 million in total iPhone shipments. For the March quarter, the firm is holding on to a forecast of 44 million units.

Apple typically slows iPhone production by January since its focus is on the fall launch and holiday windows. If the Cowen predictions are correct, predictions in November and December of extra cuts appear to be more seasonal than anything else.




Other research outfits have been down on Apple in recent months, fueled by hints that 2018 models aren't selling as well as anticipated. Jeffries for example recently cut its stock price target from $265 to $225.

Other firms scaling back estimates include Citi, Morgan Stanley, and UBS.

Early Cowen predictions for the entirety of 2019 suggest Apple will ship less than 200 million units, which would be a drop of between 7 percent and 10 percent year-over-year. Cowen didn't immediately identify a specific cause, though the smartphone industry has begun flattening out.

Additionally, iPhones have simultaneously become fairly expensive which may be impacting demand, but given Apple's target market, perhaps not by much. A 64-gigabyte XR is $749, a full $100 more than Apple's once-standard entry pricetag. An XS is at least $999, and the XS Max starts at $1,099, climbing to $1,449 for a 512-gigabyte model -- more than some Macs. These prices can go even higher overseas, a problem given cheaper competition from Samsung and Chinese brands like Huawei and Oppo. Apple is thought to dominate the "premium" market of devices costing $400 or more.

Comments

  • Reply 1 of 11
    GeorgeBMacGeorgeBMac Posts: 3,889member
    There are multiple factors pushing iPhone sales down:
    -- It is a mature, saturated market.   Except for grade-schoolers, pretty much anybody ( in a developed country) who wants a smart phone already has a smart phone.

    -- People are keeping their iPhones longer:   Not only have carriers mostly abandoned the 2 year "free" cycle, but iPhones simply hold up better -- which is partly because their processing power has exceeded the demands of the software (my iphone 6+ is running as well now as the day I bought it) and partly because they are more dependable and don't break as frequently.

    -- 2018 was an "S" product year and there just wasn't a lot that was splashy and glittery.   The Xr was the only new iPhone -- but even that was didn't have anything particularly new in it.

    I think 2019 will be better sales wise -- particularly if it entails a 5G phone.  But, I think we need to get used to increased volatility in iPhone sales where not every year will produce increased sales. 

    But meanwhile, we will see Apple broadening out and strengthening their product lines as well as building on the interrelated nature of their products:   Services sell hardware while hardware sells the services and each product interacts with and supports the other products.

    The bottom line:   Apple and its products are maturing, changing and growing.
  • Reply 2 of 11
    rogifan_newrogifan_new Posts: 3,774member
    All these analyst reports are meaningless. We’ll know in a month how well or not the iPhone did in the holiday quarter.
    slprescott
  • Reply 3 of 11
    Genuinely hoping Apple have sold a ton less iPhones so they get the message that they are ridiculously priced these days. 

    Especially when you only get 64Gb for your $1000
    muthuk_vanalingam
  • Reply 4 of 11
    lewchenko said:
    Genuinely hoping Apple have sold a ton less iPhones so they get the message that they are ridiculously priced these days. 

    Especially when you only get 64Gb for your $1000

    Maybe if you pray hard enough Apple will fail. I wouldn’t bet on it, though. 
    dewmeevolutGeorgeBMac
  • Reply 5 of 11
    lewchenko said:
    Genuinely hoping Apple have sold a ton less iPhones so they get the message that they are ridiculously priced these days. 

    Especially when you only get 64Gb for your $1000

    Maybe if you pray hard enough Apple will fail. I wouldn’t bet on it, though. 
    Not suggesting they fail , just realise that there is a huge wave of opinion at present that their pricing strategy stinks. 

    I looked at upgrading my Air2 iPad recently. The low end iPad offers nothing new. Wouldn’t consider it an upgrade really.  The next up is the iPad “pro” 11” which I would consider a worthy upgrade. Then I looked at the price. 

    Fell off my chair.

    double what I paid for my iPad. (And that’s for the base 64Gb model). Without the keyboard or the pencil ! Add these on and you are in la la land pricing for an iPad. 

    Just speechless.



    edited January 2
  • Reply 6 of 11
    GeorgeBMacGeorgeBMac Posts: 3,889member
    lewchenko said:
    lewchenko said:
    Genuinely hoping Apple have sold a ton less iPhones so they get the message that they are ridiculously priced these days. 

    Especially when you only get 64Gb for your $1000

    Maybe if you pray hard enough Apple will fail. I wouldn’t bet on it, though. 
    Not suggesting they fail , just realise that there is a huge wave of opinion at present that their pricing strategy stinks. 

    I looked at upgrading my Air2 iPad recently. The low end iPad offers nothing new. Wouldn’t consider it an upgrade really.  The next up is the iPad “pro” 11” which I would consider a worthy upgrade. Then I looked at the price. 

    Fell off my chair.

    double what I paid for my iPad. (And that’s for the base 64Gb model). Without the keyboard or the pencil ! Add these on and you are in la la land pricing for an iPad. 

    Just speechless.



    If you can't see the difference between an iPad Air2 and a Gen6 either you don't need a new device or (most likely) you need to buy an Android device.  They cater to those who like the shiny new objects and don't care about quality or performance.
  • Reply 7 of 11
    The air 2 is a great iPad and it was shocking for apple to remove its laminated display from the newer non-pro models. Restricting the True Tone screen colour filter to pro models is also pretty lame.
  • Reply 8 of 11
    Totally agreed. Apple is still making great products, but the desire to expand the profit margins further has resulted in pricing that is not justifiable. 

    Mall my computing devices are Apple. Every year I buy Apple devices for Christmas gifts. Until this year. The reason? I couldn’t afford to. I always match what I get one niece and nephew to the others so no one is left out. If one gets an iPad, iPhone, watch, notebook, etc. then so do the others. Sure it’s expensive. But it’s doable. Until now. 

    The pricing isn’t reflective of the great quality nor is it an indication of “the Apple tax.” It’s the tax on top of the Apple tax.”

    its inexcuseable really. 

    Mite just one way for Apple to say they’re still on top in the event of a temporary sales shortcoming. “Shut look st the money we raked in anyway.” Che time cooks speech on “its not about the money.”

    it really is when the cost of indistrial dedign has been laid over and over again with great profit on top of it. Then more profit into the stratosphere beyond that. And the components aren’t causing others to price like that. The amount of money for RAM and SSD. Storage is pretty distorted as well. 

    May have to go sit this season out. Hopefully the spring brings a better pricing scheme. 
  • Reply 9 of 11
    sirlance99sirlance99 Posts: 1,121member
    lewchenko said:
    Genuinely hoping Apple have sold a ton less iPhones so they get the message that they are ridiculously priced these days. 

    Especially when you only get 64Gb for your $1000

    Maybe if you pray hard enough Apple will fail. I wouldn’t bet on it, though. 
    This didn’t age well. 
    microbe
  • Reply 10 of 11
    djsherlydjsherly Posts: 1,014member
    https://www.theverge.com/2019/1/2/18165804/apple-iphone-sales-weak-demand-tim-cook-letter-revised-q1-estimate

    So all those people who rubbished the promotional pricing concerns? There’s a reason why Apple did this, and here it is.
    microbeksecmuthuk_vanalingam
  • Reply 11 of 11
    GeorgeBMacGeorgeBMac Posts: 3,889member
    Totally agreed. Apple is still making great products, but the desire to expand the profit margins further has resulted in pricing that is not justifiable. 

    Mall my computing devices are Apple. Every year I buy Apple devices for Christmas gifts. Until this year. The reason? I couldn’t afford to. I always match what I get one niece and nephew to the others so no one is left out. If one gets an iPad, iPhone, watch, notebook, etc. then so do the others. Sure it’s expensive. But it’s doable. Until now. 

    The pricing isn’t reflective of the great quality nor is it an indication of “the Apple tax.” It’s the tax on top of the Apple tax.”

    its inexcuseable really. 

    Mite just one way for Apple to say they’re still on top in the event of a temporary sales shortcoming. “Shut look st the money we raked in anyway.” Che time cooks speech on “its not about the money.”

    it really is when the cost of indistrial dedign has been laid over and over again with great profit on top of it. Then more profit into the stratosphere beyond that. And the components aren’t causing others to price like that. The amount of money for RAM and SSD. Storage is pretty distorted as well. 

    May have to go sit this season out. Hopefully the spring brings a better pricing scheme. 
    If you're talking iPhone then it is the OLED display that really increased the pricing.  The Xr is reasonable.
    If you're talking iPad, the Gen6 is very affordable.
    MacBook Airs and Mini's increased somewhat, but they are discounted through 3rd parties (at least the MBA).
    The Apple Watch also went up sharply -- but there's still the series 3 at very reasonable price.

    Other than that, there's a bunch of ancillary products like Airpods.

    Apple has carefully provided lower cost options in most of their product lines.
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