Analyst Says iPhone X Estimates Are Inflated

Wall Street firm CLSA warned that, despite rumors of a recent correction to its first quarter numbers, Apple iPhone X volume expectations are likely still too high.

According to news from a report in Taiwan’s Economic Daily, Apple will slash its sales forecast for the iPhone X in its first quarter to 30 million units, down from an initial plan of 50 million units, which caused the company’s shares to close down 2.5 percent one day later.

However, CNBC reports that CLSA believes those adjusted expectations are still too high.

“We maintain that 2017 fourth-quarter iPhone X volumes were at 30 to 35 million, and we are very skeptical that volumes will increase in the first quarter of 2018,” CLSA Analyst Nicolas Baratte wrote in a note on Tuesday. “This does not reconcile with the expectation of pent-up demand or push-out to the first quarter of 2018 in our opinion: Consumers who wanted to get an iPhone X in December 2017 already have it.”

Baratte went on to explain that any forecast that puts first-quarter volume over 35 million units “will prove too high.”

Still, not all analysts are skeptical about the iPhone X’s numbers. Last week, Chicago-based Loop Capital predicted shipments of 40 million to 45 million units in the first quarter of 2018, while analysts at Piper Jaffray forecasted around 40 million iPhone X sales for the first quarter.

In addition, a recent Street survey reinforced Piper Jaffray Analyst Michael Olson’s expectation that the variety of iPhones sold in 2018 will include a significant number of new models.

“Our survey of 400 iPhone buyers indicates that iPhone X and iPhone 8 mix is similar to our expectations, increasing our confidence in average selling price assumptions for the current quarter and FY18,” Olson wrote on Tuesday. “Our iPhone average selling price assumption of $720, therefore, appears achievable, increasing our confidence in revenue and earnings per share estimates.”

Olson and Baratte did agree on one thing: If volume remains a concern, Apple might want to consider cutting the iPhone X’s hefty price.

“We expect a lower-priced X-gen option (likely the current iPhone X with a price cut), and we wouldn’t be surprised to see a ‘plus’ X-gen model in 2018,” added Olson.



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