"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 8 hours Millennials Are Waiting For A $30T Inheritance That Might Not Come
  • 9 hours Is This the Tipping Point for American Credit Card Debt?
  • 10 hours Tech Icon Predicts A Big Future For Ethereum
  • 11 hours Apple Doubles Down On Data Privacy
  • 12 hours Where To Look As The Treasury Bond Bull Run Loses Steam
  • 13 hours The Tech Giants Poised For A Breakout
  • 15 hours The U.S. Dollar Is Set To Continue Its Rally
  • 16 hours Bitcoin Plummets On Price Manipulation Investigation
  • 1 day The Multi-Billion-Dollar Business Of Influence Peddling
  • 1 day Goldman Backed ‘Stablecoin’ Hopes To Curb Crypto Volatility
  • 1 day Consumers Lost $1.6M To Crypto Fraud In Australia
  • 1 day Facebook May Soon Become A Paid Service
  • 2 days How Far Can Gold Prices Fall?
  • 2 days The Battle For Shkreli's $2 Million Wu-Tang Record
  • 2 days The Bitcoin Miner Eyeing A $1 Billion IPO
  • 2 days China’s Social Credit Score Blacklists Travelers For Bad Behavior
  • 2 days Micron Soars On $10-Billion Share Buyback
  • 2 days Nearly Half Of All Americans Are Struggling Financially
  • 2 days Could Crypto Solve The Middle East’s Currency Crisis?
  • 3 days The Biggest Hurdle For The Buffett-Bezos Healthcare Plan
The Tech Giants Poised For A Breakout

The Tech Giants Poised For A Breakout

Bullish sentiment seems to have…

The Five Most Important Market Indicators

The Five Most Important Market Indicators

Stock markets can be overwhelming…

Michael Scott

Michael Scott

Michael Scott majored in International Business at San Francisco State University and University of Economics, Prague. He is now working as a news editor for…

More Info

Is This The Death Of The iPhone X?

Apple

Fear that sales of Apple’s new iPhone X won’t be as stellar as hoped, the company’s stock took a turn for the red Friday, making it the worst-performing stock on the Dow for the day as shares slipped more than 1 percent from the beginning of the year.

The sentiment shifted after a Morgan Stanley note on Friday morning predicting that iPhone sales will not only fail to meet expectations but will come in 10 million below what Wall Street envisioned.

Apple shares fell 4.1 percent right after Morgan Stanley’s note, and by 2:03p.m. EST, shares hadn’t managed to pare much loss.

(Click to enlarge)

Morgan Stanley analyst Katy Huberty said: "We expect Apple to report an in-line March quarter but are cautious into earnings on May 1 due to our belief that June quarter consensus estimates need to be revised lower."

In line with this, Morgan Stanley lowered June quarter iPhone unit estimates to 34 million, down from 40.5 million, while average forecasts were closer to 43 million.

The expectations now are that Apple will hit problems with its suppliers and weaker-than-expected data from China will also take its toll. Key among supplier problems is weak guidance from Taiwan Semiconductor Manufacturing, a top Apple supplier.

In earnings this week, TSM warned of “mobile softness” and “continued weak demand”.

There is also uncertainty as to whether LG will be able to fill Apple’s OLED screen supply needs in time. Related: Farmers On Edge As Trade War Hits U.S. Grain Shipments

But the Morgan Stanley note was nothing compared to another prediction that this year will be the last year of the iPhone X.

Analyst Neil Campling of MIrabaud predicted the iPhone X would be discontinued this year, citing “the declines in iPhone X orders and the inventory issue at TSMC at record highs which basically reflect a need to burn off inventory”.

“Why?” Campling posed, as reported by CNBC: “Because the iPhone X is dead.”

Not that many would agree with Campling.

Speaking to CNBC, Patrick Moorhead, president of Moor Insights and Strategy, said Apple might update the iPhone X, but not kill it, criticizing Campling for not making sense.

“The iPhone X was Apple’s most expensive phone and the company sold, in units, more than any of its other phones, so I’d say it’s a success. […] The suppliers impacted have likely been replaced with another supplier so their numbers are going down.”

But there’s also a bigger picture here: Smartphone sales across the board are stagnating, and it has nothing to do with supplies. The International Monetary Fund says the global smartphone boom has already peaked.

That means for Apple, too. According to Bloomberg, analysts only expect Apple to sell 3 percent more smartphones this year than they did last year. That gets worst in 2019, when the expectation is only 1 percent more.

(Click to enlarge)

Apple reports its earnings on May 1, and until then, analysts will be scrambling to get on top of the wider situation and we may see more forecast dumps.

By Michael Scott for Safehaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment