The upside to Apple's halving of iPhone X production

January 30, 2018 // By Peter Clarke
Apple Inc. will slow production of its flagship iPhone – the $999 iPhone X – by 50 percent in the first three months of 2018 because of a lack of demand, according to a Nikkei report.

And if true that has both negative and positive implications.

It could be an indicator of saturation in the global smartphone market. This has already occurred in the personal and tablet computer markets and perhaps the smartphone's time is coming in 2018. It could be an indicator that a slow down in Moore's Law is being reflected in features that are not sufficiently attractive to command a premium price. Or it could be that Apple just got its pricing wrong. But there are also other possibilities that speak to issues of consumerism versus ecological sustainability.

First quarter production of the iPhone X could now be about 20 million units the Nikkei report said, quoting a note written by JP Morgan analysts. Given the significance of Apple as a buyer of semiconductors – it takes about 10 percent of global output – this could have a big impact on slowing what was booming growth in the chip market in 2017 (see Samsung, Apple bought 19.5% of global chip supply in 2017 and WSTS trims 2017, boosts 2018 chip market forecasts).

The current thinking is that Apple will hit sales and profits expectations in its upcoming 1QFY18 financial results announcement on Thursday February 1, but that the iPhone X slow down could impact the forecast for 2QFY18.

For some people any reduction in the recent feverish mood of the chip market is a bad thing. Clearly those in the fabbed and fabless chip companies like plenty of demand and the chance to push prices upwards. And of course the iPhone X situation is particularly relevant to Apple suppliers such as STMicroelectronics, Dialog and AMS. But for buyers of chips a slowing of the chip market will likely come as a relief. The prices of those hard-to-order memory and logic ICs and lead times could be about to reduce as demand comes in to closer balance with supply.

Nikkei reported that there are indicators of lower than expected sales of the iPhone X in the holiday season in Europe, the US and China and that customers are opting to keep their mobile phones for longer.

Next: So what features


Vous êtes certain ?

Si vous désactivez les cookies, vous ne pouvez plus naviguer sur le site.

Vous allez être rediriger vers Google.