Between the barrage of reports about dwindling sales and production cuts, it would appear that Apple is having some trouble selling its thousand-dollar iPhone X.
As you’ll recall, in the months leading up to its November 3 launch, the company’s first Face ID & OLED equipped iPhone model was widely expected to sell like hot-cakes. And though initial pre-order and launch day indications hinted that sales were off to a strong start, these emerging reports make it clear that at least some analysts are becoming increasingly skeptical about the device.
Just yesterday, The Wall Street Journal published a report indicating that since iPhone X demand began dwindling earlier this month, Apple’s stock (NASDAQ: AAPL) has taken a minimum 5.1 percent hit — meaning the company lost an estimated $ 46.4 billion in value so far this year — though its stock was up slightly as of Wednesday morning trading.
More Doom and Gloom?
Unfortunately, since Apple never breaks down its iPhone sales by the model, we may never know the real, total number of iPhone X units sold during the holiday shopping quarter.
And though we’re just a day away from the company’s anticipated earnings call tomorrow afternoon — during which we should get a better idea, at least — one super-skeptical analyst is now suggesting it’s not the figures Apple will reveal tomorrow we should even be worrying about..
Rather, it’s the company’s outlook moving forward that’s of imminent reason for concern, according to BMO Capital Markets analyst, Tim Long.
So What’s the Issue?
Long predicted in his latest research note that Apple will encounter “problems,” “down the road,” because the ASP (or average selling price) of its iPhone models will remain for the most part stagnant from here on out — a reality which he suggests will affect the company’s profitability moving forward as the cost of components rise.
“Following 10 years where ASPs have generally moved higher, we believe prices will plateau as with the rest of the industry,” Long wrote in a research note this week, adding that, up until this point “Apple has done a good job of moving ASPs higher despite others in the industry flat-lining.”
Nevertheless, Long said, “We estimate that about 30% of iPhones will be priced over $ 900 this year, but we do not expect this figure to go any higher, particularly as only 12% of smartphones globally sell for over $ 600.”
Worth pointing out is that while iPhone X currently retails for $ 999 or $ 1,149, depending on your storage preferences, Apple is rumored to be readying an even larger and, consequentially, more expensive ‘iPhone X Plus’ model this fall, alongside a refreshed 5.8-inch OLED, and all-new 6.1-inch LCD model.
While Long doesn’t mention the iPhone X Plus, specifically, he does go on to provide an overall skeptical outlook for iPhone sales in the coming months, saying that while “We still view the iPhone base as growing, and the devices are on average getting older” — “without a compelling product cycle in September, we may see a slow upgrade cycle once again.”
He went on to equate the recent surge in Apple’s stock to a similar rally which took place back in early, 2016.
“But later that year, many investors started looking towards OLED and the 10-year anniversary phone, which drove the stock higher,” Long recalls, cautioning that “No such product is on the horizon now.”
As a result of these concerns, Long revised his second-quarter revenue outlook for Apple down to just $ 39.9 billion from his previous estimate of $ 46 billion; while his annual revenue estimate was brought down to just $ 161 billion from $ 176.88 billion.
Of course, while Long’s analysis certainly appears to be ‘on the page’, especially with regards to Apple’s increasingly smaller window of opportunity to profit on its increasingly more expensive iPhone — it’s simply too early in the year to start reaching such firm conclusions about what’s to come.
Learn More: 5 Ways Apple Can Fix Slumping iPhone X Sales