The eye-watering iPhone X price (from $1579) burned a hole in consumers pockets. But the apparent lack of demand has burned even deeper holes in supplier’s pockets.
Apple vigorously guards its sales figures, so, no one knows iPhone X sales. All it reports is ‘strong iPhone sales’.
GadgetGuy reported in February that the Nikkei Asian Review said that Apple had notified its suppliers of a 50% reduction in its orders to only produce around 20 million X handsets in Q1, 2018.
Now reports say that X production has been cut yet again to 8 million units in Q2, 2018.
Analysts and component makers agree that Apple made 40 million X in Q4, 2017. But sales stalled and analysts are saying the iPhone X is a flop.
Apple analysts now say that total sales of the iPhone X will be around 41 million. That leaves a very big boatload of stock in warehouses. Potentially 27 million unsold which is more than Apple expect to sell before a model refresh in November.
Consumer Intelligence Research Partner reports are even more pessimistic.
Josh Lowitz, CIRP Partner and Co-Founder said, “iPhone X saw its share fall to 16%, down from 20% in the December 2017 quarter. iPhone 8/Plus share improved relative to the December 2017 quarter, 44% of sales, compared to 41% in the last quarter.”
iPhone models introduced in 2015 and 2016 continued to show strong sales. The year-old iPhone 7/Plus accounted for almost 20% of sales, and the two-year-old iPhone 6S/Plus had 13% of sales. Even the SE held its own at 8%, down slightly from 11%, and actually up slightly over the December 2017 quarter.
With eight models available, and the newest ones costing close to $1,000, consumers appear to want older, cheaper models that have many of the same features.
Still to sell 60 million plus iPhone X is an achievement. Especially if Apple retrospectively claims it was a one-off model.
The iPhone X losers are its suppliers
If the iPhone X is a flop, then its suppliers suffer.
Samsung has reported lower than expected orders for the iPhone X OLED screen. It has advised its turnover will be down by over US$1 billion this quarter.
TSMC (chip maker) has reported a 10% revenue drop.
Laser technology company AMS that is behind the iPhone X facial recognition system is hurting. Its shares tumbled 14% on news of Apple cutbacks.
Reuters notes that two other companies were hit. Dialog Semiconductor, which supplies power management chips to Apple, fell 5.4% while STMicro fell as much as 4% in early trading.
Barclays analyst Andrew Gardiner said that poor iPhone X sales were the reason. “The imminent end-of-life for iPhone X is leading to a deeper trough than the most cautious of estimates.”
Why is the iPhone X not selling like hotcakes?
The iPhone X notch is here to stay – maybe. The Asian market has voted that they don’t like it despite Huawei emulating it on the latest P20/Pro. “The top-notch phone isn’t what it is cracked up to be.”
The eye-watering price does not help. “Apple will never concede that at $1549 it is far too expensive … Time for Apple to get a reality check methinks.”
The feature set is not sufficient to entice iPhone 6/7 users to migrate. Comments usually follow, “It does nothing that I need or want to do that my iPhone 7 can’t do for half the price. How stupid do you think we are? Very obviously.”
Macworld reports, “All the latest problems to afflict the iPhone X, including unresponsive screens, incoming call delays, Face ID security, buzzing speakers, headaches and a green line…”
Qualcomm simply wants the iPhone X gone – and is trying to sue Apple accordingly
Please don’t get GadgetGuy wrong – we believe Tim Cook’s oft-repeated, trite, cliché, “It is the best iPhone ever made” just as Steve Jobs et al. have described every other iPhone.