• 8 mins COVID Has Sparked A Surge In Cybercrime
  • 6 hours Precious Metals Bulls Still Have Plenty Of Room To Run
  • 1 day The U.S. Has The Tech To Go Green, But Will It Use It?
  • 1 day Massive Losses Force Russian Commodities Giant To Slash Dividends
  • 2 days Markets Up On Stimulus Hope
  • 2 days UK To Invest In Europe's First Geothermal Lithium Recovery Plant
  • 3 days TikTok Takes Center Stage In US-China Tech War
  • 3 days Are Semiconductor Stocks Overvalued?
  • 4 days Jobs Report Doesn’t Say Much Amid COVID Uncertainty
  • 4 days Crypto FOMO Heats Up As Bitcoin Climbs Above $11,000
  • 5 days Aluminum Is Bouncing Back In China
  • 5 days The Deep-Sea Mining Debate
  • 6 days Markets Trending Down Despite Tech Blow-Out
  • 6 days Big Oil Battered On Dismal Earnings
  • 7 days Russian Billionaire Bails On Mid-Sized Gold Miner
  • 7 days Gold Stocks Gear Up For A Big Autumn
  • 8 days America Is Looking To Bring Nuclear Power To Space
  • 8 days What Is Behind Gold's Astonishing Rally?
  • 9 days Stocks Tumble On Brutal Economic Report
  • 9 days Kodak Soars By 400% After Trump Bump
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Michael Scott

Michael Scott

Writer, Safehaven.com

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…

Contact Author

  1. Home
  2. Markets
  3. Other

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