Analyst returns to shovel more dirt on the Apple iPhone X's grave

Nearly two weeks ago, Mirabaud Securities analyst Neil Campling pronounced the Apple iPhone X "dead." This was based on TSMC's inventory of chips, which was reportedly at an all-time high. In addition, TSMC's recent earnings report included lower revenue forecasts for the remainder of the year. Sales to Apple are said to account for 20% of TSMC's revenue and the company blamed the weakness on sales of an unnamed high-end phone, which Campling said was the iPhone X.

Today, just minutes before Apple is to announce its fiscal Q2 earnings and reveal how many iPhone units it sold in the period, Campling is back to shovel more dirt on the iPhone X's grave. Pointing out slower growth in the just reported first quarter earnings released by a company called Cognex, Campling says that this is a further sign that Apple has decided to kill its tenth anniversary model.

It turns out that technology made by Cognex is used by Apple's contract manufacturers to perfectly fit the OLED panel on the iPhone X. Similar to TSMC, Apple accounts for 20% of Cognex's gross revenue. Campling says that the slowdown at Cognex is a sign that "Apple is stepping back from the iPhone X production cycle." Cognex reported Q1 earnings on Monday that were up 22% year-over-year, down from the 40% growth reported for the first quarter of 2017. In addition, Cognex lowered its forecast for second quarter revenue below Wall Street expectations.


With his perceived death of the iPhone X, Campling sees Apple coming out with a cheaper model of the phone later this year. Meanwhile, Ming-Chi Kuo, the famed KGI Securities analyst who is leaving the firm, expects Apple to unveil three new models next year. He says two will be iPhone X sequels with a 5.8-inch and 6.5-inch OLED displays, while the third will be a cheaper model with a 6.1-inch LCD screen.

source: CNBC