Apple's Decision to Slash iPhone X Production Volume in Q1 2018 Could Delay Future OLED Models

[russelljg]

I did read the article, but the article doesn't know how many Apple expected to sell. Only Apple knows that number. All the article could know is how fast Apple is asking for them to be produced.

We go through the same thing every year. Apple ramps up production in the fall to meet the peak launch and holiday demand, then they reduce production in the early part of the year after they have met the initial demand. And every year we see multiple articles pointing to this decrease in production as a negative.

In which case I'm sure the analyst would see it as normal business practice, however the article is clearly suggesting that production has been further cut due to 'lower than expected sales'.

The likely reasons for that having been discussed in numerous threads.

 

[CausticSoda]

With the margin and profit Apple is making, its is surprising to see that they would rather cut back production then cut prices on the iPhone X.

Not really. It would be an admission of failure, and infuriate those who forked out for it (many of whom would be the most loyal fans). Better to put a brave face on it, drop the like in the future, and call it the special one-off tenth anniversary premium design/model etc. I bought one in the end; I needed an upgrade. It's OK, but I don't love it by any means. If I had needed to scrimp/save/borrow to buy one, I would be very disappointed.

 

[BaldiMac]

Just read the article! It said:
The U.S. tech giant notified suppliers that it had decided to cut the target for the period to around 20 million units, in light of slower-than-expected sales in the year-end holiday shopping season in key markets such as Europe, the U.S. and China.
It clearly says that Apple intended to sell 40 million Xs (that's what "target" means) but now is asking to cut the order.

The facts of that statement don't disagree with what I said. They simply reduced the production rate after meeting initial demand.

Here's the same article last year about the iPhone 7.
http://www.iphonehacks.com/2016/12/iphone-7-production-cuts-q1-2017.html

Here's the same article about the iPhone 8
https://www.extremetech.com/mobile/257715-rumor-iphone-8-production-slashed-50-apple-stock-drops-3

Here's the same article about the iPhone 6 and 6S.
https://www.macrumors.com/2016/01/05/apple-cutting-iphone-6s-production/
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In which case I'm sure the analyst would see it as normal business practice, however the article is clearing suggesting that production has been further cut due to 'lower than expected sales'.

The likely reasons for that having been discussed in numerous threads.

See above. It is a normal business practice. This may surprise you, but often tech reporters try to frame Apple news in a negative light to generate page views.

 

[DotCom2]

Let us not forget that *sometimes* these rumors are for market manipulation purposes and are not based on reality.
Just sayin'

 

[Rogifan]

Stock manipulation conspiracy theories? Surprising, coming from you.

Apple is an incredibly voliitle stock considering it’s size. Certainly more volatile than FANG stocks. PE is much lower than other big cap tech stocks. Neither Tim Cook nor anyone else in Apple leadership has been able to change the narrative that Apple is always one quarter away from disaster. Every iPhone rumor from unnamed sources causes the stock to drop. I want leadership to do something to change the narrative around the company/stock.

 

[NT1440]

In which case I'm sure the analyst would see it as normal business practice, however the article is clearly suggesting that production has been further cut due to 'lower than expected sales'.

The likely reasons for that having been discussed in numerous threads.

Yes, the likely reasons for this rumor can be seen in the same rumor coming up this time each year going back at least 5 years.

I mean, why learn anything from this same cycle of FUD every year when we could keep falling for the same nonsense everytime?

 

[springsup]

Apple is an incredibly voliitle stock considering it’s size. Certainly more volatile than FANG stocks. PE is much lower than other big cap tech stocks. Neither Tim Cook nor anyone else in Apple leadership has been able to change the narrative that Apple is always one quarter away from disaster. Every iPhone rumor from unnamed sources causes the stock to drop. I want leadership to do something to change the narrative around the company/stock.

Diversify, perhaps? Investors clearly put a huge amount of weight on the success of each new iPhone model, and how that new model upholds/diminishes Apple’s brand.

When the new model disappoints, investors get spooked. Not a real mystery as to why.

 

[johnfrombeyond]

You can't spin this as a positive.

Nikkei has made this same statement every January since 2013 (iPhone n sales are dropping because component orders are dropping!!!). Every year, they have been wrong, and there has not been a correlation to actual sales. Trying to predict sales based on component orders is like reading tea leaves.

 

[NT1440]

Apple is an incredibly voliitle stock considering it’s size. Certainly more volatile than FANG stocks. PE is much lower than other big cap tech stocks. Neither Tim Cook nor anyone else in Apple leadership has been able to change the narrative that Apple is always one quarter away from disaster. Every iPhone rumor from unnamed sources causes the stock to drop. I want leadership to do something to change the narrative around the company/stock.

How can a company do anything against what is clearly stock manipulation?

Jim Kramer was caught red handed laying out this rumor mill tactic for short trading Apple stock, and was publicly humiliated for it.

“Apple, it’s very important to spread the rumor that both Verizon and AT&T decided they didn’t like the phone… and this is very easy because the people who write about Apple want that story and you can claim that it’s credible because you spoke to someone at Apple because Apple doesn’t issue any statements." Cramer says he would do this in conjunction with placing large put orders (1,000 blocks) to create the impression that something was happening and then HE would call Pisani and say, "hey, something is happening, there’s a lot of put buying going on at Apple... What’s important when you’re in that hedge fund mode, is not to do anything remotely truthful, because the truth is so against your view that it’s important to create a new truth, to develop a fiction. And the fiction is developed by almost anybody who is down like 2% to up 6% a year…" -Jim Kramer

Same tactic, different year.

https://www.google.com/amp/s/seekin...mits-to-stock-manipulation-when-at-hedge-fund

 

[DynaFXD]

It's a pocketable super computer not just a phone.

It's a high-end ultra portable camera, 4K video capture device, NFC Payment manager, fitness tracker compass, level, calendar, GPS, personal assistant, PODcast/music manager and player, among many other things. Those that label these things as "simply phones" are the same people that get upset when GPS is slow to sync up when the satellites are "just right there!" I think we (X owners) get it, it is an expensive device and that cost and feature set is not for everyone. For those other folks there is a whole stable of Apple phones that offer a more affordable alternative. But if you want to be in the Apple eco-system with the level of features that the X has, then them's the breaks; pay to play. Why people tend to focus on the X sales and not look at the whole picture is beyond me. If Apple sold only 1 X, and that was to me, and a billion other phones that would be OK in my book.

 

[Rogifan]

How can a company do anything against what is clearly stock manipulation?

Jim Kramer was caught red handed laying out this rumor mill tactic for short trading Apple stock, and was publicly humiliated for it.

“Apple, it’s very important to spread the rumor that both Verizon and AT&T decided they didn’t like the phone… and this is very easy because the people who write about Apple want that story and you can claim that it’s credible because you spoke to someone at Apple because Apple doesn’t issue any statements." Cramer says he would do this in conjunction with placing large put orders (1,000 blocks) to create the impression that something was happening and then HE would call Pisani and say, "hey, something is happening, there’s a lot of put buying going on at Apple... What’s important when you’re in that hedge fund mode, is not to do anything remotely truthful, because the truth is so against your view that it’s important to create a new truth, to develop a fiction. And the fiction is developed by almost anybody who is down like 2% to up 6% a year…" -Jim Kramer

Same tactic, different year.

https://www.google.com/amp/s/seekin...mits-to-stock-manipulation-when-at-hedge-fund

Disgusting.

 

[falainber]

It's a high-end ultra portable camera, 4K video capture device, NFC Payment manager, fitness tracker compass, level, calendar, GPS, personal assistant, PODcast/music manager and player, among many other things. Those that label these things as "simply phones" are the same people that get upset when GPS is slow to sync up when the satellites are "just right there!" I think we (X owners) get it, it is an expensive device and that cost and feature set is not for everyone. For those other folks there is a whole stable of Apple phones that offer a more affordable alternative. But if you want to be in the Apple eco-system with the level of features that the X has, then them's the breaks; pay to play. Why people tend to focus on the X sales and not look at the whole picture is beyond me. If Apple sold only 1 X, and that was to me, and a billion other phones that would be OK in my book.

All the features that you listed (with more functional NFC) can be had for $400. Some people seemingly started realizing this. Being in Apple ecosystem is generally not a goal. There is nothing in this ecosystem that you can't do outside of it. There are many things missing in this ecosystem compared to the tech world in general.
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Apple is an incredibly voliitle stock considering it’s size. Certainly more volatile than FANG stocks. PE is much lower than other big cap tech stocks. Neither Tim Cook nor anyone else in Apple leadership has been able to change the narrative that Apple is always one quarter away from disaster. Every iPhone rumor from unnamed sources causes the stock to drop. I want leadership to do something to change the narrative around the company/stock.

Why would you care about it? Obviously, in your position you can't do anything to influence Apple leadership. You can easily sell your AAPL shares though and thus solve the problem (for you).

 

[genovelle]

Apple is set to halve its 40 million iPhone X production target in the three month period from January, reported Nikkei Asian Review on Monday without naming a source.

Part of the reason for the high price tag of iPhone X is said to be down to the cost of OLED panels made by Samsung, which is the only supplier of the component that can guarantee Apple a steady supply of the screens. According to Nikkei, Apple is now considering an increase to the proportion of LCD iPhone models by reducing production of the OLED screen models scheduled for release this year.

Apple is expected to launch a trio of new iPhone models in 2018, including 5.8-inch and 6.5-inch models with OLED displays and a 6.1-inch model with an LCD display, according to respected KGI Securities analyst Ming-Chi Kuo. However, at least one other analyst has predicted that the LCD-to-OLED ratio this year will actually be 2:1.

DigiTimes' Luke Lin believes Apple is increasingly leaning towards releasing two LCD-based models and a single larger 6.4- to 6.5-inch OLED model. Indeed, today's Nikkei report claims lackluster sales for iPhone X could actually result in a delay to the company's plans to introduce OLED screens in other models, potentially adding weight to DigiTimes' prediction.
Nikkei added that Apple is expected to maintain a total production target of 30 million units for lower priced models such as the iPhone 8, iPhone 8 Plus and iPhone 7. Apple Japan replied to Nikkei's request for comment by stating that it would confirm the details with headquarters.

Article Link: Apple's Decision to Slash iPhone X Production Volume in Q1 2018 Could Delay Future OLED Models

 

[Val-kyrie]

previously sales were lower than expected in China, but now sales are also lower than expected in US and Europe? - So basically sales was lower than expected in all key markets.

There is another story circulating on other tech sites that Samsung has had to reduce its production of OLED panels for the first time due to weak demand for Apple's iPhone X.

 

[Ffosse]

I think the X is good value at 999 Pounds- it complements my 8 nicely and was an impulse buy for me. And people forget to mention that there is sales tax in the US on top of the 999 dollars.

 

[dazz87]

Even apple knows this is an over price phone.......

 

[genovelle]

Here we go again. Unnamed sources saying Apple is doomed and claiming poor sales before Apple announces actual sales unlike any of their competitors. The stock crashes at the beginning of the year because these sites and media spread these claims and the haters run with it. Then the manipulators make a killing when Apple releases the real numbers.

 

[IJ Reilly]

Diversify, perhaps? Investors clearly put a huge amount of weight on the success of each new iPhone model, and how that new model upholds/diminishes Apple’s brand.

When the new model disappoints, investors get spooked. Not a real mystery as to why.

Yup, you beat me to the answer. Analysts wouldn't be hanging on every shred of iPhone news if the company wasn't so highly dependent on the one product for their bottom line.

 

[Ffosse]

Buy an SE if you're cheap and just want to hate on Apple.

 

[IJ Reilly]

How can a company do anything against what is clearly stock manipulation?

Jim Kramer was caught red handed laying out this rumor mill tactic for short trading Apple stock, and was publicly humiliated for it.

“Apple, it’s very important to spread the rumor that both Verizon and AT&T decided they didn’t like the phone… and this is very easy because the people who write about Apple want that story and you can claim that it’s credible because you spoke to someone at Apple because Apple doesn’t issue any statements." Cramer says he would do this in conjunction with placing large put orders (1,000 blocks) to create the impression that something was happening and then HE would call Pisani and say, "hey, something is happening, there’s a lot of put buying going on at Apple... What’s important when you’re in that hedge fund mode, is not to do anything remotely truthful, because the truth is so against your view that it’s important to create a new truth, to develop a fiction. And the fiction is developed by almost anybody who is down like 2% to up 6% a year…" -Jim Kramer

Same tactic, different year.

https://www.google.com/amp/s/seekin...mits-to-stock-manipulation-when-at-hedge-fund

Um, no. Analysts analyze, that's their job. As the article points out, market manipulation is actually a crime. To automatically charge that every opinion issued by an analyst is criminal activity is way over the top to start, and especially when it is made without any proof or evidence.

 

[rowspaxe]

Yes. I really wanted an X as soon as possible. I was afraid if I messed around with Apple or AT&T's financing stuff, it would delay things and I wouldn't get a phone until March. Looking back now, we can all see their weren't the shortages for the phone that I think a lot of people expected.

Should have included this in first question, but at what price do you think you would have passed on the iphone X. Too clarify, I am an apple fan. I think for instance--I would pay up to $1300 for the ipad pro 12.9". I might pay $1200 for a phone, with a commitment to keeping for an extra year.

 

[SSDGUY]

I've never used a X, but the other night a friend said he absolutely hates his iPhone X — and he's not new to the platform … said he loved his iPhone 6. He made comments like "nothing works right". I was surprised.

 

[BaldiMac]

Yup, you beat me to the answer. Analysts wouldn't be hanging on every shred of iPhone news if the company wasn't so highly dependent on the one product for their bottom line.

And yet even if we ignore profits from the iPhone, Apple still probably makes more than Alphabet (#2 in market cap)!

 

[WannaGoMac]

This thread is hilarious in its lack of perspective. Potentially, 60+ million iPhones priced over $1,000 in 6 months, and people want to write this off as not selling so well.

Well said. yes a lot of people posting how horrible it is are just angry bitter people...

I do not have one, but I do share the sentiment of not spending so much freaking money for a phone. I got a used LG G4 for $220. It has no home button, but it does have bezels at the top and bottom. However, close enough. Especially when I get to save $800 to $1000. And I consider it having Android as a positive. If it were bad, I would've left a long time ago.

I have my Ipod Touch 5 and Ipad Air for iOS access, so that's really the best of all worlds.

Yeah, Apple's trying to pass themselves off as some "fashion thing", where people will spend more money due to the brand name and the aesthetics of the product.

All the features that you listed (with more functional NFC) can be had for $400. Some people seemingly started realizing this. Being in Apple ecosystem is generally not a goal. There is nothing in this ecosystem that you can't do outside of it. There are many things missing in this ecosystem compared to the tech world in general.
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Why would you care about it? Obviously, in your position you can't do anything to influence Apple leadership. You can easily sell your AAPL shares though and thus solve the problem (for you).

This is such a boring old argument. Apple stuff is far from a fashion statement and if it ever was one its been YEARS since anyone saw it as something special. Not sure why so many people walk around spewing this "Apple is a fashion" blah blah still.

What you get with apple is something only one Android device does (and at best 2 years post release date), consistent and reliable software updates. My iPhone 5 got timely updates for 5 years (. Name one android phone that does similarly, heck even the Google android phones get 2 years (dont get me started on Google abandoning my Nexus 7 tablet 1.5 years after i bought it). It's a joke the number of android devices in existence with active and easily exploited exploits. And lets not even get into the lackluster privacy protection that was the norm for Android apps for years until google finally got around to putting more finite control over permissions a user granted an app, and the continued malware sort of apps in the Google Play store.

I too think Apple is expensive. then I remind myself that I do get something for that money, support.

 

[bmark]

Apple finally realized a $999 price point it too high for the average consumer. Now they are going back to LCD's at a lower price point. Epic failure on their part, can't wait to hear their spin job on Q1 financials Thursday. Also get rid of the freaking notch in the latest iPhone, no one cares for it at all.