Forecasts for iPhone production cuts are becoming a familiar refrain but they are now reaching a crescendo mode as an analyst from the research shop Rosenblatt is predicting in MarketWatch a new round of order cuts for the March quarter.
The iPhone XR is expected to take the biggest hit, as it may amount to 2.5 million out of the 4 million total order dive. The iPhone XS orders are said to be slashed with 1.5 million, and the most expensive XS Max might see the smallest drop in production orders, to the tune of half a million.
Our iPhone estimates have been lowered to 39 mln units for the March quarter, and we believe iPhone shipments will be down 10% y/y in C2018, as we already expect Apple might continue cutting their production for the March quarter. We will review our estimates in January, but we continue to believe Street estimates for March and C2019 still need to come down.
In his memo to clients, the analyst cites headwinds in China following the arrest of Huawei's heiress by the Canadian authorities on the request of the US federal government for violating sanctions against Iran. China retaliated by granting an injunction against older iPhones in the Qualcomm patent case against Apple. Adding to the legal troubles, Germany also made Apple pull iPhone 8 Plus and below from stores until the patent lawsuit dust settles.
The combination of tepid demand for newer iPhones with potential bans on older models in some markets sounds like the perfect storm for Apple, sending its stock price into the first "death cross" in three years. Apple's shares have spiraled down with one of the steepest declines on record for the company, admittedly from record highs, too. Apple is not alone in this latest market rout, as mounting privacy, revenue and other issues brought down Facebook, Netflix, Google's Alphabet and countless other tech stocks in the last few months or so.
This Apple stock chart from Google Finance depicts the steep share price decline
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Daniel, a devoted tech writer at PhoneArena since 2010, has been engrossed in mobile technology since the Windows Mobile era. His expertise spans mobile hardware, software, and carrier networks, and he's keenly interested in the future of digital health, car connectivity, and 5G. Beyond his professional pursuits, Daniel finds balance in travel, reading, and exploring new tech innovations, while contemplating the ethical and privacy implications of our digital future.
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