Apple Inc. saw Wall Street investment firm Credit Suisse lower its iPhone unit sales estimates for the year thanks to higher average selling prices (ASPs) for new iPhone models and lower-than-expected production of its iPhone X.
According to a Seeking Alpha report, Credit Suisse expects iPhone sales of 217 million units for all of 2017, down from its past target of 223 million units, and unit shipments of 233 million in 2018, down from 248 million. The investment firm also lowered its estimates for Apple suppliers due to lower unit sales. Electronic component manufacturing company TPK Holding will also see a 10 percent reduction in earnings per share (EPS) estimates for this year and 20 percent for next year. TPK supplies the organic light-emitting diode (OLED)-based 3D sensors for the iPhone X.
The Seeking Alpha article noted the reduction in shipments for the iPhone comes amid reports Apple is having a tough time perfecting the 3D sensor in the iPhone X set to be released in November. The Nikkei Asian Review reported last week that the 3D sensors are responsible for enabling Apple's much-touted facial recognition technology.
Citing a technology executive familiar with production of the iPhone X, the Nikkei Asian Review revealed the issue is with the dot projectors in the TrueDepth camera system on the smartphone, part of Apple’s new facial recognition technology enabling users to unlock phones and pay digitally, Seeking Alpha reported. The unnamed executive’s comments were reiterated by Jeff Pu, an analyst at Yuanta Securities Investment Consulting, which said the dot projectors are preventing the iPhone X from being built on a mass production level.
Pu, however, still believes the iPhone X will begin mass production in the middle of October and will begin shipping from China in the third week of the month. The analyst noted Apple will produce 36 million iPhone Xs in 2017, down from his past estimate of 40 million.