Demand for new iPhone models likely to stagnate in the end of 2018
It’s likely that the high demand for the new Apple iPhone XS series, introduced recently, will lower in a notable manner despite its initial success, predict Asian distributors. There’s a clear reason for it – the price level of the new gadgets, especially the flagship iPhone XS Max model, has been set rather high.
Even the initial sales wave that immediately followed the introduction was not as impressive in case of both the XS and the XS Max models, as it was in case of the earlier iPhone 6 generation. There were two different reasons for the customers’ reluctant attitude towards these two models. In case of the XS it is the absence of principal upgrades, while for the XS Max it is the exorbitant price.
In fact, the forecasts are so pessimistic, that if they do come true, the sales momentum fades away and the international sales are, in fact, lower than the expectations, Apple is planning to notable lower its orders to suppliers, which is just what happened with both iPhone 6 and 7.
There are some hopes invested in the iPhone XR, slated to become available in the end of October, but the forecasts are still rather cautious, considering the fact that the price to performance ratio is less than impressive compared to various Android-based flagship models.
In fact, the degree of disappointment with the new iPhone models may be so significant that some of the supply chain makers who’ve invested significant amounts of money in upgrading their facilities in order to secure Apple shipments may have to deal with the risks.
The manufacturer, however, may not particularly suffer from loss of revenue in case of low sales, even those the recent sales of iPhone 8 and iPhone X models were less than impressive, since its brand premium is keeping it afloat.
The supply chain makers, especially those who don’t have the technological innovations, are unlikely to see an improvement in their profits this year. Taiwan Semiconductor Manufacturing Company and Largan Precision may be an exception, but others are at risk.
Since the stagnation of shipment growth has hit the market, Apple’s suppliers in Taiwan experienced a drop in the share price. Foxconn Electronics, for instance, has had its share price fall as much as 38% in just over a year.
Foxconn’s net profits actually declined 9.42% in the first six months of 2018 to US$1.355 billion (NT$41.57 billion), while the УEPS shares remained at NT$2.4, down from NT$2.66 one year before.
In any case, whether the new iPhone models, especially the dual-SIM XR, will be a success in China in the context of the US-China trade wars remains to be seen.Source