Another weekend closer to Christmas, another weekend of discounts on Apple’s latest iPhone models, and another batch of data that suggests Tim Cook and his team have seriously misjudged the demand for the latest iOS-powered smartphones. All of that is going to have long-term implications.
The latest data came over the weekend from noted analyst Ming-Chi Kuo. He previously offered an estimate for 2019 Q1 sales of 47-52 millions iPhones. That estimate has been cut by twenty percent and Kuo is offering just 38-42 million handset sales. MacRumors covers the research note:
We have reduced our 1Q19 iPhone shipment estimation by 20% to 38–42mn units (vs. our previous forecast of 47–52mn): We cut the 1Q19 iPhone shipment estimation again for the following reasons. (1) Lower-than-expected XR demand. We have reduced our 1Q19 XR shipment estimation to 15–20mn units vs. our previous forecast of 20–25mn units. (2) The increase in orders of legacy iPhone models cannot offset the decline of XR and XS series shipments because of the low season impact.
Apple's first quarter of 2018 saw 52.2 million sales, so even the upper range of Kuo’s estimate would result in a significant hit on iPhone sales.
Of course Tim Cook and Apple have already announced that Apple’s quarterly earnings report will no longer be announcing iPhone sales numbers, citing a move towards software and services rather than hardware sales.
Unfortunately the iPhone continues to be Apple’s top product and is the profit engine that drives the whole empire. In the short-term if the iPhone fails to deliver sales, then - no matter the size of the margin - the impact will be seen on the bottom line. And in the long-term reduces the addressable size of the iOS ecosystem that Apple is relying on for future growth and profit.
Is it any wonder that Apple is investigating cheaper components, the return of old technology, and testing out lower pricing, while hiding the sales numbers?
Now read why Apple may have made a mistake by cancelling the iPhone SE…
