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Apple shares drop on iPhone 8 demand worries

iphone 8

CALIFORNIA: Apple Inc’s shares fell 1.5 percent in premarket trading on Thursday as brokers and traders speculated over poor demand and cuts in production of iPhone 8, ahead of the November launch of the 10th anniversary iPhone X.

Apple no longer gives regular updates on sales numbers but indications from supply channels, phone operators and analysts who track the sector have fueled talk of poor sales for the latest update of the smartphone.

KeyBanc Capital Markets analyst John Vinh reported earlier this week that a carrier store survey suggested the iPhone 7 was outselling the new phone just a month after the latter’s launch.

The iPhone X, eagerly awaited by fans, will go on sale from Nov. 3 and may also be weighing on demand.

Some analysts cited a report in Taiwan-based newspaper Economic Times, in which an unnamed source talked of a 50 percent cut in orders for the iPhone 8.

Analysts believe Apple is likely to focus more on iPhone X, which looks radically different with an edge-to-edge display, and will retail from $999, boosting the company’s margins.

Rosenblatt Securities analyst Jun Zhang said he believed Apple could cut iPhone 8 production and shift capacity toward iPhone X as the premium phone is expected to sell out quickly.

“Our research suggests the production mix was 50/50 between iPhone 8/8 Plus and the iPhone X, but iPhone X allocation could shift up to 60-70 percent in December and even more in the March quarter,” Zhang wrote in a note.

Deutsche Bank analysts, however, played down the importance of any cut in iPhone 8 production in favor of iPhone X.

“We think the market could have over-focused on the production swing in different SKUs, but overlooked that the overall iPhone production is largely on track,” they wrote, differentiating between different Taiwanese suppliers.

Pegatron Corp shares were down 2.7 percent and Wistron Corp down 1.2 percent in Taiwan Stock Exchange. Hon Hai shares were up 1.35 percent.

Shares of Apple were trading down $2.46, or 1.5 percent, at $157.30 in premarket trading on the Nasdaq.

 

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