Ming-Chi Kuo Says iPhone XR Demand Has Been Lower Than Expected, Slashes Shipment Estimates

[I7guy]

So basically the Elantra has the M5 engine, suspension, and chassis? If you want to use a better comparison, say the difference in a XR and XS is the difference between a GT3 and GT3RS. For all intents and purposes, the GT3 is the RS with less aero, 500HP vs 520HP. The XR May go down as the most underrated iPhone (mostly by the general public) ever. Which is odd, because basically every reviewer and or blogger raves about the XR, and several have swapped out XS for the XR.
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I think they Xr is a great phone and appeals to those who want most of the Xs/Xs max tech at a lower price point. I was just responding to the OP using similar logic using a car analogy. However, there are those who believe the Xr is "substandard" phone by Apple standards. Opinions...we all have them.

 

[NetMage]

The price is not the only factor. Many people simply don't want to carry a flat-screen television in their front pocket.
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Not very many people - in its first year, the SE with the then current SOC was 10% of sales and all the older small factor phones totaled 16%. Naturally sales dropped as the SE got older. The vast majority want larger screens and while an SE2 with XR tech would be a great product it might not pay its own development costs.
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Not only that but there’s something going on with the XS screens, it can’t just be PWM because many OLED phones use PWM and I don’t feel anything using them, but the XS I immediately feel strained and get a headache later.

The iPhone actually uses less PWM then other OLED phones and can be used without PWM: https://blog.elcomsoft.com/2018/03/...to-stop-oled-flickering-in-just-three-clicks/

 

[MikeSmoke]

iOS 12 has improved the performance on older model iPhones. Enough that many will stay put and wait until their phone actually fails.

 

[falainber]

Was there some new hit product from one of these other manufacturers that justify the increase exactly at the time of iPhone launch? Have you asked that to yourself before pasting this meme?

I would not know. Then of course you have no idea either. The simple fact is that it's stupid to claim that Foxconn profits are any indication of iPhone sales because iPhone is just a fraction of Foxconn business.

Edit: BTW, I hear that Huawei has been outselling Apple lately and guess who assembles their phones (hint: Foxconn)

 

[halluxsinister]

iPhone XR demand has been lower than expected, according to Apple analyst Ming-Chi Kuo, who has slashed his overall iPhone shipment forecast by 20 percent for the first quarter of 2019. He now expects Apple to move 38-42 million iPhones in the quarter, down from his original estimate of 47-52 million.

Kuo, in a research note with TF International Securities, obtained by MacRumors:Apple reported sales of 52.2 million iPhones in the first quarter of 2018, which corresponds with the second quarter of Apple's fiscal year, so as few as 38 million units in the first quarter of 2019 would be a significant year-over-year decline.

For the iPhone XR in particular, Kuo has revised his shipment estimate to 15-20 million for the first quarter, down from 20-25 million.

Kuo estimates annual iPhone shipments will fall between 205 million and 210 million in 2018, and based on that, forecasts that annual iPhone shipments in 2019 will decline up to 10 percent to a range of 188 million to 194 million. This would fall below Wall Street's consensus estimate of around 212 million units in 2019.

While this news paints a pessimistic outlook for the iPhone, declining unit sales will likely be at least partially offset by the rising average selling price of iPhones. Apple's latest iPhone lineup is its most expensive yet, with the $349 iPhone SE discontinued and the iPhone XS Max topping out at $1,449 with 512GB of storage.

Kuo:Apple will no longer be disclosing unit sales in its quarterly earnings reports going forward, so investors will have to look towards iPhone revenue to determine how well the handset is selling. If unit sales are particularly bad, then a rising average selling price might not be enough to hide the weakness.

Apple has been aggressively marketing its latest iPhones. On its website, for example, the iPhone XR and iPhone XS take up the entire homepage with advertised starting prices of $449 and $699 respectively. However, each have an asterisk that leads to fine print that says pricing is based on an iPhone 7 Plus trade-in.

Apple's earnings results for the first quarter of 2019 will likely be released in May, so we're still some time away from real numbers.

Article Link: Ming-Chi Kuo Says iPhone XR Demand Has Been Lower Than Expected, Slashes Shipment Estimates

Perhaps adding features might boast sales. For example, there’s this amazing technology that allows you to connect headphones or other audio devices as outputs for stereo sound through wires, allowing the signal itslef to POWER or drive the speakers without a flakey, crappy, unreliable Bluetooth radio signal. Also, providing power via the cable means one fewer batteries to worry about going dead on you, namely, the headphones’ battery. Less stuff for you to have to carry around. This amazing technology requires minimal hardware be added, and would require little in terms of space or power. It’s called a JACK. Apple might even have people who work there who know how to include this remarkable wonder of modern engineering into their current, defective and deficient designs.

If they want to make space for this, they could get rid of that stupid f%@&!#@ NOTCH. That should free up enough internal volume to allow the adding of this amazing “JACK” technology.

They should try THAT. Also, maybe if they make them a little thicker, they could add a relliable battery, instead of one designed to fail, requiring the device be slowed down before they reached their expected service life.

Feh. Apple... A company that has lost its way from whom I used to buy stuff sometimes.

 

[NetMage]

People just grew tired with Apple's tactics with new iPhones. XS starts at $999 for minuscule difference from the X, and XR while still a good phone, hindered by relatively "low resolution" display.

So the XS starts at the exact same price as the X, with a much improved camera, much faster SOC, better FaceID, mainly internal improvements just like every S model before it. The XR has the same ppi as the 6,7,8 before it with a bigger screen, so how is that “low resolution “?
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To keep it as short as possible, I don't want to have to look at my phone to unlock it or to use Apple Pay. Pressing a button is just so much more automatic and intuitive. Face ID and the lack of a home button with gestures add extra unneeded steps. Those steps might be super minuscule, but they add up and offer no real improvement to the user.

After some use, you find that it is actually less steps than a TouchID most of the time. Do you often use your phone without looking at it?

 

[I7guy]

I would not know. Then of course you have no idea either. The simple fact is that it's stupid to claim that Foxconn profits are any indication of iPhone sales because iPhone is just a fraction of Foxconn business.

Edit: BTW, I hear that Huawei has been outselling Apple lately and guess who assembles their phones (hint: Foxconn)

Do you have some citations about iPhone being a fraction of Foxconn business..because I believe you are so wrong on that. You have repeated that multiple times.

 

[NetMage]

In what world is a used iPhone 7 worth $300? They aren't even going for that much on the direct-to-consumer market like eBay or Swappa. They are inflating the value of the trade-in to above market value to subsidize the new phone. A subsidy is also known as a discount.

The $300 is for trade-in of a 7 Plus, which are certainly going for more on eBay. Your point loses its impact when it isn’t based on facts.

 

[Mars56]

phones are lasting a very long time these days

 

[JullsJTRIRE]

Maybe people simply tired of iPhones and there are so many brands that iOs may be getting overshadowed slowly but inevitably

 

[carrrrrlos]

Too expensive and too big. Apple’s latest iPhone line-up is now big, bigger and biggest. Bring back the 5e form factor w/ X edge to edge screen.

 

[chatin]

That's quite a haircut for the iPhone. 10 million fewer on the upper end. Expected, as the smartphone becomes a commodity.

 

[TrickyTreeRed]

Not very many people - in its first year, the SE with the then current SOC was 10% of sales and all the older small factor phones totaled 16%. Naturally sales dropped as the SE got older. The vast majority want larger screens and while an SE2 with XR tech would be a great product it might not pay its own development costs.

10 per cent is still a massive number. Apple sells around 200,000,000 iPhones annually - so that SE number represents 20,000,000 units.

Yes the SE sold are a price below the average iPhone unit, but Apple is not just a hardware company. More-and-more of their profits are coming from services such as iCloud storage, iTunes and the AppStore.

Apple need their customers to remain loyal to iOS. The best way to do this is offer enough of a selection of products to appeal to all.

I think the company should sell phones in three sizes - small (SE sized), medium (XS sized), and large (XS sized) but cut down on the number of models. Sell the current and previous generation versions only. And stop manufacturing the generation of phone that’s on the chopping block three months before the newest release. This will keep supply tight.

Apple would also be wise to sell the iPhone not at maximum profit level, but at a price that keep current customers in the iOS ecosystem and is attractive enough to entice new ones.

Again, Apple reaps zero dollars from the Google Play Store and Google Music. Apple earns about $125 annually from each customer from iCloud, iTunes and iCloud services. That’s easy math to figure out and easy money lost if people leave the Apple ecosystem. Multiply this by the average time a person keeps their smartphone - let’s say that is two-plus years.

A happy and satisfied customer is a loyal and repeat customer. No amount of flashing advertising can make up for this.

 

[StellarVixen]

The iPhone actually uses less PWM then other OLED phones and can be used without PWM: https://blog.elcomsoft.com/2018/03/...to-stop-oled-flickering-in-just-three-clicks/

That's too much compromise. Say goodbye to battery life with phone's brightness being always 50 or more percent.

 

[dilbert99]

Yes, it’s a little fussy, but sometimes so was Touch ID.

This doesn’t bother me.

Some things are faster, to me.

Not swiping up to unlock means you can look at notifications easily and then relock the phone. Pros and cons I guess.

Thing is different people want different things, I get notifications on my watch so don't need access to them on the lock screen.
Its just a shame that Apple doesn't like to give people choices.

 

[EightyTwenty]

All of their phones are just too big now. Apple used to be the king of smaller phones. Now the smallest screen is 5.8”. Wish we’d get a SE2.

 

[The-Real-Deal82]

I suppose in fairness to Apple they are pushing the XR more than any of their other iPhones. On TV it’s XR all the way and even in the stores. I just hope Apple recognises after this year that this is the iPhone most likely to appeal to the mass market. They also need to think about offering a smaller alternative too as it’s a common complaint I hear that phones are now too big for some.

 

[dilbert99]

How so is apple overcharging?

If the following analysis turns out to be true, then Apple is overcharging.
If not then buyers of iPhones are not price sensitive.

Kuo estimates annual iPhone shipments will fall between 205 million and 210 million in 2018, and based on that, forecasts that annual iPhone shipments in 2019 will decline up to 10 percent to a range of 188 million to 194 million. This would fall below Wall Street's consensus estimate of around 212 million units in 2019.

The Xs Max, which has technology never used in iphones before

Department of the bleeding obvious springs to mind.
My laptop has more power than supercomputers from years past and contains technology never used in laptops before.

 

[Abazigal]

Its just a shame that Apple doesn't like to give people choices.

You are realising that only now?

 

[The-Real-Deal82]

I don't understand why the Xr is considered too expensive. Last year, Apple sold the iPhone 8 plus for $799 at launch. The Xr seems to be a better deal for $749 at launch.....bigger screen in a smaller footprint, Face ID, A12 Bionic, more color options.....etc.

Maybe it is because people are comparing the Xr to prior Apple "economy" devices, like the iPhone 5c. But in terms of product positioning, I don't think Apple ever expected the Xr to sell to the same target market as the 5c.

Based on what Apple said at the Keynote, they are trying to offer most of the new technology features of the Xs/Xs-max in the lower cost and less premium package of the Xr. I think Apple is well aware of the fact that there are cheaper alternatives. The Xr is not Apple's response to the low cost competitors. The older iPhones (8, 7, 6s) are Apple's low cost offerings. I guess what has people worked up is that Apple no longer offers a new low cost option.....SE, 5C, etc.

I think you’re slightly off there as we used to have iPhones for £619 so it’s not about consumers comparing to devices like the 5C at all. The iPhone 5, 5S, 6 and 6S were around the £600 mark at launch and now the cheapest new device in £749 and is a rather large offering. Do you not think that perhaps a higher price and only one size has put a lot of people off considering the XR?

I think this is the reason the iPhone 7 and 8 are selling better than most of the other models right now. The prices are right and the form is a size most people are used to.

 

[kafka27]

I work for one of the two biggest carriers and the XR is by far our best selling phone. So this news comes at a surprise to me.

I think that's because the world market is a little bit bigger than Central FL Area
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When they hit that trillion mark, there's nowhere to go but up for the shareholders. So they worked themselves into this shoot. They now have to maintain that.

What are you talking about bro ? Since they hit that trillion mark.. Apple went down almost 30% on stocks

 

[Saskat]

This by itself doesn’t mean much. Could it be people are buying Xs and Max instead?

 

[dilbert99]

Funny thought.

Given that the entire market is down with Amazon and Microsoft shares down more than Apple, should we conclude that Amazon and Microsoft shares have dropped as well after influential analyst slashes his iPhone estimate?

If you look at the biggest losses the three companies have endured over a 2-3 months period, they have lost a max of:

Biggest loses recently:
Apple 29% between 3-Oct and 14-Dec
Microsoft 9% between 4-Sept and 20-Nov
Amazon 26% between 4-Sept and 20-Nov

And if you look over a longer fixed 3 month period, 14-Sept to 14-Dec
Fixed 3 month period ending yesterday
Apple 26.5%
Microsoft 6.5%
Amazon 19.2%

I'm not sure where you are getting your facts from but they look wrong to me, care to put up your calculations?

 

[MultiMan]

So the XS starts at the exact same price as the X, with a much improved camera, much faster SOC, better FaceID, mainly internal improvements just like every S model before it. The XR has the same ppi as the 6,7,8 before it with a bigger screen, so how is that “low resolution “?

Same price in the US, yes, not abroad due to currency and other factors that Apple could have mitigated by lesser margins. Their competitors have. Xs is substantially more costly than X in Sweden as one example.
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After some use, you find that it is actually less steps than a TouchID most of the time. Do you often use your phone without looking at it?

Very often yes, as I use it as electronic identification when using my regular computer and it happens many times a day. I've got my phone laying under the screen and FaceID doesn't work in that angle. Just putting the finger on the reader works perfect every time. I also drive motorcycles in the summer and snowmobile in the winter, both with helmet on. Sometimes even need a balaclava just walking due to extrem cold weather here in the north. Apple going to FaceID only is an important factor in me not getting an iPhone again.

 

[dilbert99]

You are realising that only now?

Was that really worth posting?