Report on weak iPhone X demand leads to drop in shares

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A disappointing report related to Apple’s latest iPhone offering, iPhone X, led to a dip in shares for two straight days on Tuesday. Several of Apple’s Asian suppliers’ shares fell after a report from Taiwan’s Economic Daily indicated that demand for the device, which went on sale in November, may come in far below expectations in the first quarter.

The Taiwanese newspaper report cited unidentified sources on Monday when it revealed that Apple will cut its sales forecast for the iPhone X to 30 million units for the quarter, down from the 50 million units they had initially anticipated.

However, Apple has not publicly disclosed the quarterly sales targets for the new phone, according to CNBC, and an Apple spokeswoman said the company does not comment on market rumors. Nonetheless, shares of Apple have fallen, opening down nearly 3 percent on Tuesday.

CNBC reports:

Apple suppliers that were most hit included Genius Electronic Optical Co Ltd which dropped 2.4 percent on Tuesday to take its losses this week to 11.4 percent.

Pegatron also fell on both days, losing 3.2 percent this week.

But falls for Foxconn, one of Apple’s main suppliers, formally known as Hon Hai Precision Industry, were milder and it has lost only 1.8 percent over the two days.

According to some analysts, the disappointing demand for the new iPhone may stem from slow production rates. Chinese broker Sinolink Securities noted production rates and a high price tag on the phone as reasons the product lacks enthusiastic buyers.

JL Warren Capital, a U.S. company, predicted only 25 million units will be shipped as consumers were not pleased to pay the “high price point” for a product that had no “interesting innovations.”

According to CNBC, others were more “bullish.” Chicago-based Loop Capital said that while 30 million to 35 million units were sought in the current quarter, the March and June quarters “will have a significant amount of iPhone X make-up shipments.” They forecasted shipments of 40 million to 45 million units in the first quarter of 2018.

Apple CEO Tim Cook has said he “couldn’t be happier” with the demand for the iPhone X in China.

Apple is currently valued at just under $900 billion, with stocks having risen over 50 percent in 2017.

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