iPhone XR Has Slumped in Demand, Forcing Famed Apple Analyst to Reduce First Quarter Sales Forecast by 20%
Famed Apple analyst, Ming-Chi Kuo of TF International Securities, has reduced his first-quarter iPhone sales estimates, primarily because of lower demand for the iPhone XR. Kuo is a widely followed analyst on Wall Street and his predictions affect the stock greatly. His forecast comes on the heels of various other reports that indicate that performance of the latest iPhones has been lukewarm so far.
Kuo’s Estimates Are Lower Than That of Other Analysts – Earlier He Predicted That iPhone XR Would Be the Best Model out of 2018 Lineup
First of all, it is important to note that Apple reports its financials according to its fiscal quarter, which is three months adjusted from the calendar quarterly period that starts in January. Kuo’s report is on the bases of the calendar, which means Apple’s Q1 2019 earnings are reflective of the October-December quarter.
Kuo has estimated sales of 38-42 million units in Q1 2019, which is nearly 10 million short of the sales in the year-ago quarter. Kuo’s forecasts for the sales of iPhones in 2019 are lower than the estimates of most other analysts, who predict that shipments will reach 200 million units. Kuo believes that total iPhone shipments for 2018 would be nearly 210 million and he thinks that this figure will be reduced by nearly 5 to 10 percent next year. This means that he expects Apple to ship nearly 188 to 194 million iPhones in 2019.
Kuo is said to have close ties to the Cupertino’s giant’s suppliers, and he thinks that low demand for the iPhone XR is the reason behind shipment decline. He also said that the higher sales of the older models, such as the iPhone 7 and iPhone 8 will not be enough to compensate for the lower sales of the iPhone XS, iPhone XS Max, and iPhones XR when the holiday season ends. He had initially estimated 20 to 25 iPhone XR million shipments for Q1 2019 but has now lowered that forecast to 15-20 million.
Apple’s most sensible iPhone for 2018 is the iPhone XR and it costs just $749 while giving you a full-screen design, upgraded Face ID, A12 Bionic chipset and an impressive single camera solution on both sides. Unfortunately, that might not be enough when selling the device in droves. However, in 2019, the company might significantly reduce the price of the device, making it more attractive to the masses.