Apple iPhone X, the redesigned iPhone with edge-to-edge display and facial recognition system, might not be selling as well as previously anticipated. The iPhone X starting at $999 is the most expensive iPhone yet and analysts believe the high entry price is deterring consumers from upgrading to the new model. Also Read - Apple adds UPI, RuPay, net banking on App Store: How to add new payment methodsAlso Read - Samsung Galaxy A22 in pictures: A fancy 5G phone
In an earnings update, Taiwan Semiconductor Manufacturing Co. (TSMC) claims that second-quarter revenues would be lower due to weak demand from the mobile sector. The announcement rang alarm bells on other side of the continent with Apple losing nearly $60 billion in market capitalization in two days. TSMC is the biggest supplier of Apple and its order books are mainly driven by the work it does for the Cupertino-based iPhone maker. There are also reports of other Apple suppliers cutting down on production due to weak demand from Apple. Also Read - Samsung Galaxy A22 5G review: Looks fancy, runs fast but too pricey
Now, leading analysts claim that the iPhone X is dead. Neil Campling, analyst at Mirbaud Securities told CNBC that TSMC’s record inventory levels are mainly due to Apple not buying components for future iPhone X models. He adds that high inventory at Apple’s main supplier indicates the company would kill off the model this year. Campling believes Apple will introduce new models in the iPhone lineup this year and will continue to sell older stock of the iPhone X but no new units will be produced by the company.
“With the declines in iPhone X orders and the inventory issue at TSMC at record highs, which basically reflect a need to burn off inventory. Why? Because the iPhone X is dead,” Campling wrote in his note.
Campling believes iPhone X is not selling well because it is too expensive and consumers are turning their backs on the high-price smartphones. The statement closely resonates one made by Ming-Chi Kuo, the leading Apple analyst at KGI Securities. Kuo had said that iPhone X will reach its end of life around mid-2018 and lowered its shipment estimates as well.
Watch: Apple iPhone X Video Review
Meanwhile, another Apple supplier LG Display is said to be struggling to make OLED panels for next-generation iPhone. Apple switched to OLED panels last year with the launch of iPhone X. Samsung is the sole supplier of OLED panels for iPhone X and Apple was expected to add LG Display as the second supplier this year. However, the Wall Street Journal reported on Friday that LG has hit manufacturing issues and won’t be able to supply OLED screens for iPhones this year.
Apple is now expected to stick with Samsung for OLED panels this year as well. In fall this year, Apple is expected to introduce new three iPhone models – two models with OLED displays and one model featuring LCD display. All the three models are expected to feature Face ID and design similar to that of iPhone X. Now, Apple is expected to switch to OLED display for all iPhone models in 2019.
Last week, Kuo had said Apple is planning to introduce the LCD model of the iPhone X in two variants this year. He believes the LCD iPhone will come in standard single-SIM connection and a dual-SIM model especially for markets like India and China. He believes the LCD model could start for as low as $550 (approximately Rs 36,000) and the dual-SIM variant will “help increase market share in China and commercial markets.”
During the first quarter earnings, Apple had announced a revenue guidance between $60 billion and $62 billion, which is lower than the $88.3 billion revenue posted during the quarter ending December 30,2017. However, the guidance is higher than in the past and now it needs to be seen whether Apple misses its own target.