As iPhone X Production Halved, Chinese Consumers' Lack of Interest Cited

sThe smartphone has become commoditized and there is little more profitable market share to be had. Most of the people who can afford one, have one.

The sales figures suggest that consumers no longer believe the iPhone is sufficiently differentiated from its less expensive rivals to justify the additional cost.

The bigger question is whether the rumors that the iPhone X may even be de-emphasized or even discontinued. JL 

Michael Spencer reports in Medium and Muvija M reports in Reuters:

Apple will halve its iPhone X production target for the first three months of the year, prompted by slower-than-expected sales in Europe, the United States and China. Verizon said  its postpaid device activations were lower as people were keeping phones longer. Apple isn’t only not innovating the product, it’s losing marketshare to hungrier Asian smartphone rivals. Leaks reveal the iPhone X will be discontinued because of a lack of interest by the Chinese consumer.

Reuters - Apple Inc (AAPL.O) will halve its iPhone X production target for the first three months of the year to around 20 million units, Nikkei reported on Monday, sending its shares down 1.6 percent.

The report added to growing concerns about weak sales of the $999 phone, making investors jittery about the company’s financial outlook when it reports first-quarter results on Thursday.
Apple’s shares fell to their lowest level in 2018, knocking off $14 billion from the company’s market value. The company declined to comment.

Analyst Toni Sacconaghi of Bernstein cut both his second-quarter and full-year forecasts for iPhones but said he did not expect Apple’s 2018 profit to fall steeply because of changes to U.S. tax law that will bring the company’s rate down to 18 percent.
“Apple earnings should handily beat December quarter expectations, but March guidance could moderately disappoint,” UBS analysts said.
The production cut was prompted by slower-than-expected sales in the holiday shopping season in Europe, the United States and China, the Japanese newspaper reported, without citing a source. (s.nikkei.com/2BASQZU)
The iPhone X was the first phone to sport a new design since the launch of the iPhone 6 in 2015 and many expected it to lead to blockbuster sales, dubbed by Wall Street analysts as a “supercycle.”
“This was supposed to be the supercycle year and if Apple hasn’t been able to drive substantial unit growth this year, then that makes you a little cautious on future iPhone cycles,” Atlantic Equities analyst James Cordwell said.

Several analysts have lowered their estimates for iPhone X shipments in the past few weeks, citing the high price of the device and other factors, with at least three downgrading their rating on the stock.
Sacconaghi of Bernstein had originally predicted that Apple would outpace Wall Street expectations of 62 million iPhones by selling 66 million units, but on Monday he cut that figure to 53 million units, a nearly 20-percent cut. He also cut his full year iPhone unit forecast 11 percent to 220 million units.
But he only slightly revised his full-year earnings per share estimate for 2018 to $11.80 from $11.87, citing the positive effects of U.S. tax law changes.

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Adding to the concerns, Verizon Communications Inc (VZ.N) said last week its postpaid device activations were lower than last year as people were keeping phones longer.
A survey of people planning to buy the iPhone showed that the percentage of them looking to buy the iPhone X has dropped to 37 percent from 43 percent in an earlier survey, UBS analysts wrote in a note on Monday.
The iPhone X, which features an edge-to-edge display and facial recognition technology to unlock the phone, went on sale in November in the United States.
Asian supply chain checks suggest that iPhone X orders have been weakening recently, with first-quarter production likely to be about 20 million units, JP Morgan analysts wrote in a note dated Jan. 24.
A few of Apple’s iPhone parts suppliers are based in Asia. Shares of Foxconn, one of Apple’s main suppliers and formally known as Hon Hai Precision Industry Co Ltd (2317.TW), fell 0.7 percent on Monday.

Shares of U.S.-listed Apple suppliers such as Micron Technology Inc (MU.O) edged lower following Nikkei’s report.

Medium - Apple leaks reveal the iPhone X will be discontinued because of a lack of interest by the Chinese consumer.

Apple isn’t only not innovating the product, it’s losing marketshare to hungrier Asian smartphone rivals. With Apple striking deals with Tencent, the writing was on the wall.

The Chinese and Asian consumer is increasingly the end-game of all tech hardware and sales.

The trends have been obvious for quite some time.

The iPhone is no longer cool, no longer seen as a luxury item and Apple’s brand is on the decline.

The rise of Chinese smartphone players is not something that Apple will ever get back. Xiaomi’s success in India in 2017 was nothing but miraculous. Apple products were once a status symbol, but the iPhoneX I suspect in terms of sales, delays and leaks, was a disaster for Apple.

Apple needs to acquire Netflix or do something noteworthy, because it’s been a brand in stagnation for quite some time.

Apple’s greedy luxury profit margins and lack of innovative product, is just not adding up the way it used to. Witness the soon to be launch of Apple’s HomePod, with a Siri that seems retarded to what Alexa and Google Assistant have become.

The iPhone X was the Beginning of the End for Apple.

When Tim Cook suggested the $999 device would “set the path of technology for the next decade”, he was lying, and he basically knew it.

Here is a product costs around $370 to make that you will be selling well in excess of $1,000 in places where that equates to a lot of savings. For Chinese consumers especially, with better home-grown products, that makes little sense.

We’ve reached saturation with phones, apps and their white-noise, notifications. Consumers just don’t care as much as they used to. Chinese smartphone makers understand the cost to value value proposition better; and the era of Silicon Valley worship itself is in decline. Big surprise, perhaps for Apple!

iPhone X Show Declining Sales for Apple’s Flagship Product

iPhone X shipments in the first quarter of 2018 were at around 18 million devices — a significant reduction on previous flagship iPhones. You were stuck between a lack lustre iPhone 8 and an over-priced toy of an iPhone X. That’s a lose-lose choice for consumers.

When you are the most profitable tech firm in the world, and you cannot even innovate — what does the future hold for your company? Apple is a bit like Facebook, riding the coattails of good timing, talent hoarding and not actually contributing much to the future of technology.

Apple will scrap the iPhoneX before 2018 is even out, and it’s a head scratcher and a changing of the guard.

It’s also a show of the decline of American innovation in technology. Even Bloomberg has ranked the U.S. outside of the top 10 most innovative countries for the first time. You can make fancy new campuses, but when your flagship product is in decline, you can’t go around promising new jobs (like Apple has).

Apple has to race Amazon and Google into healthcare and banking to stay relevant. Apple Pay has to mean something. The Apple Watch has to be the one health-tracker we all need. But as for being a smartphone first company, Apple has to pivot, in a big way.

You don’t have to be a top Apple analyst to have predicted the fall of the iPhone X, the gimmicks were abundant and the price wasn’t quite right. It turns out the Chinese consumers also prefer the bigger screen of the iPhone 8.

You don’t sell only 7 million units in the Q4 of 2017 and think you have a bright future in China. Apple is not the company it once was, and as for most consumers, we’re over the collective delusion of iPhones.