Apple Gets Re-Crushed: New iPhone Prices Too Damn High?



POSTED BY Ed (12 days ago)
Time for some hefty share buybacks.

Apple suppliers are talking and filling in some details on demand for iPhones. And shares of Apple dropped another 4% mid-morning, after having dropped 6.6% on Friday, after it had reported revenues and earnings Thursday evening. Earnings and revenues rose sharply in the quarter, but only on price increases, not on increased device sales. This was spiced with an iffy forecast for holiday sales and the announcement that it would stop releasing unit-sales data for iPhones, Macs, and iPads to throw a merciful veil over the situation.

On Friday and Monday morning, market cap has plunged by about $100 billion. Shares are now down 14% from their closing price of $232.07 on October 3:

t’s tough out there in the smartphone market – and that’s what Apple has become dependent on. The market is mature. Overall global shipments in 2017 were flat and are expected to inch down this year, according to IDC. In this environment, sales increases come down to a zero-sum market share battle, and Apple’s high prices appear to not be very helpful in that respect.

“Apple has signaled disappointing demand for the new iPhone XR” that started selling in October, the Nikkei Asian Review reported this morning, citing sources from three Apple smartphone assemblers, headquartered in Taiwan: Foxconn (Hon Hai Precision Industry), Pegatron, and Wistron.

Apple told Foxconn and Pegatron to halt plans for additional iPhone XR production lines, the sourced told the Nikkei:

“For the Foxconn side, it first prepared nearly 60 assembly lines for Apple’s XR model, but recently uses only around 45 production lines as its top customer said it does not need to manufacture that many by now,” a source familiar with the situation said.

According to the source, Foxconn would produce 20% to 25% fewer units (or about 100,000 fewer units per day) than the “original optimistic outlook.”

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