Supply chain scuttlebutt stokes fears that Apple's $999 iPhone X price is too high
Ahead of typical seasonal trends, where iPhone sales traditionally cool off after the holidays, supply chain reports have begun projecting doom and gloom for Apple's flagship iPhone X, prompting analysts to cut estimates.
The hand wringing over iPhone X sales began when hit-or-miss Taiwanese industry publication the Economic Daily News cited supply chain sources as saying Apple trimmed iPhone X orders next quarter from 50 million units to 30 million. Shares of Apple suppliers subsequently fell as analysts trimmed their estimates, Bloomberg noted in a report.
Apple officials have long warned against reading too much into supply chain speculation, as the company's large and complex series of suppliers make it difficult to pinpoint specific trends.
Similar concerns already cropped up in the fall, when the iPhone 8 launched weeks ahead of the iPhone X. Market watchers pondered who would buy Apple's mid-range handset when a premium flagship model was coming shortly thereafter.
As it turned out, the iPhone 8 outperformed its predecessor, the iPhone 7. iPhone sales during the launch quarter grew to 46.7 million, driven by the debuts of the iPhone 8 and iPhone 8 Plus.
Apple does not break down iPhone sales by model, so without attempting to decipher average selling price data, it's impossible to know exactly which handset is most popular at any given time. However, the $999-and-up pricing of the iPhone X are predicted by more bullish analysts to help drive iPhone ASP to a record high of $740.
If that prediction proves true, it would blow away the $695 ASP achieved in the holiday 2016 quarter -- the first full frame of iPhone 7 and iPhone 7 Plus sales.
Sales of the iPhone X kicked off in early November, with availability limited at launch but gradually increasing. While the December quarter will represent the launch of the iPhone X, the proceeding March frame will actually be the first full quarter of iPhone X sales.
The hand wringing over iPhone X sales began when hit-or-miss Taiwanese industry publication the Economic Daily News cited supply chain sources as saying Apple trimmed iPhone X orders next quarter from 50 million units to 30 million. Shares of Apple suppliers subsequently fell as analysts trimmed their estimates, Bloomberg noted in a report.
Apple officials have long warned against reading too much into supply chain speculation, as the company's large and complex series of suppliers make it difficult to pinpoint specific trends.
Similar concerns already cropped up in the fall, when the iPhone 8 launched weeks ahead of the iPhone X. Market watchers pondered who would buy Apple's mid-range handset when a premium flagship model was coming shortly thereafter.
As it turned out, the iPhone 8 outperformed its predecessor, the iPhone 7. iPhone sales during the launch quarter grew to 46.7 million, driven by the debuts of the iPhone 8 and iPhone 8 Plus.
Apple does not break down iPhone sales by model, so without attempting to decipher average selling price data, it's impossible to know exactly which handset is most popular at any given time. However, the $999-and-up pricing of the iPhone X are predicted by more bullish analysts to help drive iPhone ASP to a record high of $740.
If that prediction proves true, it would blow away the $695 ASP achieved in the holiday 2016 quarter -- the first full frame of iPhone 7 and iPhone 7 Plus sales.
Sales of the iPhone X kicked off in early November, with availability limited at launch but gradually increasing. While the December quarter will represent the launch of the iPhone X, the proceeding March frame will actually be the first full quarter of iPhone X sales.
Comments
"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."
another made up stat the fit their narrative
This is the reason why apple doesn't 'own/make' their own parts. They design the key components to their spec, and even buy the equipment to make/assemble the parts for the supply chain, but there is huge risk in factory/staffing/inventory they avoid by jobbing it out.
“Taiwan's Economic Daily...citing unidentified sources...”
Yep, we’re full!
I also think there is truth to the pricing concerns. People focus on the pricing of the X but prices have risen overall. The highest end iPhone with every advanced feature available used to be $650. A storage upgrade put that at $750. The "low end" new iPhone now is $700. A storage upgrade puts that at $850. Since it doesn't have many of the tentpole features to drive sale since those are reserved for the X, you have to spend $1000 or $1150 respectively. That is a massive price increase no matter how people want to defend it.
For now I'm happy with my iPhone 7. That doesn't mean Apple is dying but if enough people decide their phone is good enough then we don't have the supercycle that justifies the stock price.
"Apple Inc. looks like it’s having a not-so Merry Christmas."
Really, Bloomberg?
NPR reports this morning that Apple stock is down after "reports of lackluster sales."
Stupidity reigns. The Bloomberg article is unsigned, but Gurman should be ashamed to work there anyway.
Supplies are low = Apple sucks at managing a supply chain… and Tim Cook should be fired.
Supplies are high = Apple makes an overpriced phone that no one wants…. and Tim Cook should be fired.