APPLE fans are failing to buy the pricey new iPhone models as expected, new reports suggest.
The iPhone maker has allegedly “slashed” production orders for all three 2018 models, raising the question: is the iPhone finally too expensive?
A trio of damning reports from the Wall Street Journal, Reuters and Bloomberg suggest that Apple is struggling to flog its new handsets.
The new 2018 models are the most expensive ever, ranging from £749 right up to £1,449.
The WSJ report, published today, claims Apple's new models have “created turmoil along its supply chain”.
And it notes that planning production for the cheaper iPhone XR model have been “especially problematic”.
“Around late October, Apple slashed its production plan by up to a third,” the report reads.
That means Apple knocked off a third of an alleged 70million-unit order, which suppliers were reportedly tasked with assembling between September and February.
Earlier this year, Apple became the first company in the world to earn trillion-dollar status on the stock market.
But this month has seen Apple's share price struggling – as rumours swirl about a lack of interest in new iPhones.
These struggles may partly be due to competition: rival Chinese handsets like the £499 OnePlus 6T and the supercharged £899 Huawei Mate 20 Pro are putting the iPhone under pressure.
Apple's share price has fallen 16% since November 1, largely prompted by concerns over demand for the new iPhone XR, iPhone XS and iPhone XS Max.
Of course, not everyone agrees with the sentiment that Apple's new iPhones have flopped.
Speaking to The Sun, top industry watcher Ben Wood – of CCS Insight – said concerns were overblown.
“It is almost becoming an annual tradition that ‘unnamed sources in the supply chain' fuel rumours that Apple is struggling, but it's a dangerous game to play,” he explained.
“History has shown that Apple repeatedly exceeds expectations and there is little to suggest Apple is struggling at present.”
We also spoke to Dan Ives, a tech expert at Wedbush Securities, who said that data around iPhone XR “demand” has been “bearish”.
But he was still largely positive about Apple's prospects: “The overall unit demand picture, while softening, is still seeing relative strength from iPhone X, 8/8+, and higher average selling prices [per iPhone].”
Popular gadget blog AppleInsider published an extensive editorial explaining why it's not always wise to gauge iPhone interest based on supplier reports.
For a start, these suppliers often provide parts or services to lots of different gadget companies – so any difficulties they experience can't solely be attributed to Apple.
We've also seen reports over iPhone sales be wrong in the past, particularly when based on reports around Apple suppliers.
Sadly there's a big problem for all industry watchers this year: Apple won't tell anybody how many iPhones it's sold.
Apple has always refused to forecast sales publicly, but earlier this year the Californian tech giant confirmed it would no longer reveal specific units-sold figures.
That will make it much more difficult to work out exactly whether Apple is under-performing or over-performing.
Apple's Luca Maestri, the company's financial chief, said unit sales were “Not particularly relevant for our company at this point”.
He added that they were “not necessarily representative of the underlying strength of our business”.
That, combined with concerns over iPhone XR sales, caused Apple to lose its trillion-dollar status on the stock market earlier this month.
But it's unlikely to be the end for Apple.
“On its last earning call Apple said it would no longer offer shipment numbers, which was interpreted as a sign it might be nervous about future demand for iPhones,” analyst Ben Wood told The Sun.
“But in reality, the underlying business fundamentals remain strong.
“Apple is by far and away the most profitable smartphone maker on the planet and it has successfully increased prices again and again.
“Furthermore, it is driving ongoing services revenues from its users as well.
“On this basis, even if sales volumes slipped slightly it will still be in a far better position than any of its rivals.”
Source: Thesun.co.uk
