Last month, a Wall Street Journal report claimed that Apple had cut production orders for all three iPhone models launched this year and today, Citi Research analyst William Yang has slashed its Q1 iPhone production estimates recent note to clients, joining other brokerages in lowering forecast amid reports of weak demand (via CNBC).
The analyst has nearly halved expectations on the top-end iPhone XS Max while expecting the Cupertino company to produce 45 million iPhones for the quarter, down from its earlier forecast of 50 million. The brokerage also lowered its forecast for the top-end iPhone XS Max by 48%.
“The material cut in our forecasts is driven by our view that 2018 iPhone is entering a destocking phase, which does not bode well for the supply chain,” wrote Yang:
The brokerage that has “sell” ratings on iPhone assemblers Hon Hai Precision Industry and Foxconn Technology, said it sees Hon Hai as particularly vulnerable, with higher exposure to the new models.
Shares in Apple’s Asian suppliers and assemblers slid in November after several component makers forecast weaker-than-expected sales, leading some market watchers to call the peak for iPhones in several key markets.
TF International Securities also cut its first-quarter iPhone shipments estimate by 20% earlier this month.