Apple’s Suppliers Losing Hope For The 2018 iPhone Lineup? RBC Capital Markets Expects 90 Million iPhones From Company In H2 2018

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Apr 9, 2018
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Last week we witnessed a lot of chatter in Apple’s camp, as fresh speculation highlighted Cupertino’s alleged plans for custom, ARM-based processors replacing Intel’s x86 architecture on Macs. This report comes at a time when the company desperately needs to diversify its revenue streams. Apple has relied heavily on the iPhone over the past couple of years.

Now, declining market interest in its latest smartphone trio as the market matures is ringing alarm bells across several quarters. True to form, a fresh report from analysts at RBC Capital Markets does not paint a good picture either.

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Supply Chain Analysts Believe Apple Expects To Build Around 80 – 90 Million iPhones This Year As Disappointing Sales Affect Future Shipment Estimates

This year, it’s rare for Apple’s supply chain to churn out good news. Current reports claim that the company has slashed down orders for the iPhone X by half after it failed to live up to sales projections. The resulting decline in component orders has affected a lot of suppliers, which include Samsung Display. The company invested heavily to ramp up production for OLED panels required by Apple.

However, as the iPhone X production fell, so did Samsung’s revenues from display manufacturing. Reports from South Korea claim that the company is sitting on an excess production capacity of 30,000 panels per month. In that vein, we’ve got a fresh report from RBC Capital Markets analyst Amit Daryanani. He cites Apple’s supply chain sources as the basis for the following claims.

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According to him, Apple expects to manufacture around 90 million iPhones in 2018’s second half. This might sound a lot to the layman, but in reality it represents an approximate 30% decrease in Apple’s orders analyzed against a similar time period last year.

“Compared to the very optimistic expectation for iPhone 8/X sell-through, supply chain partners now have a more subdued expectation.” Therefore, Apple’s manufacturing partners are taking cooler, more ”diligent” approach towards inventory management according to Amit.

This year, Apple will launch three iPhones according to current speculation. Two of these will succeed the iPhone X, featuring OLED displays. The third will be an LCD variant. Analysts and sources expect that the 6.1″ LCD iPhone will sell more compared to its compatriots. Apple is also expected to place the bulk of its orders on this device.

Amit further expects an iPhone production ramp starting next month. Thoughts? Let us know what you think in the comments section below and stay tuned. We’ll keep you updated on the latest.

Source: Investors

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