With Apple reportedly planning to ship 80 million new iPhones in 2018, which is about 20 percent fewer than its forecast at the same time in 2017, the tech company is seeking less iPhone parts. The company has asked suppliers for fewer components for this year's iPhone release, compared to plans for its prior launches of the iPhone 8 and iPhone X last year, Reuters reported.
Shares of Apple fell by 1.5 percent on the news and, overall, stock indexes declined with the Apple news coupled, with fears of a trade war just before the G7 summit in Canada, Reuters reported. Even so, Atlantic Equities analyst James Cordwell said Apple's news "needs to be viewed in the context of Apple probably being overly optimistic last year in relation to the prospects for its new phones, leaving it with excess inventory in the first part of this year.”
Additionally, demand for the iPhone X might have soured due to its price tag: It retails for around $1,000. One industry insider told the Nikkei Asian Review that, as a result, “Apple is quite conservative in terms of placing new orders for upcoming iPhones this year.”
The news comes as analysts had some tough questions for Apple, particularly about the iPhone X and its longer-term prospects after a Q2 earnings beat — and sluggish iPhone sales. Apple’s CEO Tim Cook emphasized in his post-earnings remarked how “beloved” the product was, noting that this quarter, for the first time since Apple split its product offering in 2014 with the iPhone 6 and 6 Plus, the premium model was the most sold iPhone.
Cook also noted that top seller status has been true in the U.S. every week since the iPhone X launch, and was true in greater China during the quarter ending last month. Though, perhaps a bit surprisingly, Cook did at least nod at the results that indicate top seller or not — the iPhone X has perhaps not lived up to what was expected of it.
“It’s one of those things where a team wins the Super Bowl," Cook said. "Maybe you want them to win by a few more points, but it’s a Super Bowl winner and that’s how we feel about it."