More analysts are piling-in on reports of disappointing sales of the iPhone X, downgrading their estimates of 2018 iPhone sales.
According to a new report from Business Insider, the analysts at Nomura believe that Apple will suffer as consumers are increasingly less willing to buy expensive smartphones. Nomura reaffirmed its neutral rating on Apple shares, predicting the company will report iPhone unit sales below expectations this year.
“Our demand checks suggest little improvement in iPhone demand in 2018. Corresponding supply chain downticks suggest iPhone expectations have yet to bottom,” Nomura analyst Jeffrey Kvaal wrote in a note to clients Monday. There are “further signs of trouble at the high end of the market. … One factor that is likely suppressing the smartphone market is price. We see several indications the market elasticity is falling.”
While it is easier for North American customers to purchase an iPhone X thanks to being able to pay in monthly bills, the majority of countries are not entitled to such a flexibility. Customers will have to pay a massive sum upfront, which is often higher than the original $1319 CAD retail price.
Additionally, not being able to receive after-sales services even after paying such a massive amount means that lots of buyers will be skeptical about its longevity.
As a result, the analysts at Nomura have also reduced the number of sales that iPhone units will be able to garner for the 2018 period.
“We thus lower our FY2018 iPhone units from 226mn to 221mn, below consensus of 224mn and our EPS from $11.56 to $11.40, also below consensus of $11.48. We maintain our $175 target and Neutral rating,” concludes Kvaal.
The reports follow another pessimistic one from Citi earlier this month, with the firm predicting that iPhone X sales will be 14M this quarter and 7M in Q2.