Firm tells suppliers to ship just 40% of components it originally ordered for the handset
It is meant to celebrate ten years of Apple's dominance of the smartphone market, but the firm may be scaling back production of the iPhone X. Suppliers are said to be shipping just 40 per cent of components originally ordered for the flagship handset, on the company's instructions. The reports have been interpreted in some quarters as a sign that the tech firm is reducing its ambitions for the device.
Taiwan-based manufacturers have claimed that Apple has instructed them to cut back on their shipments, according to reports in Digitimes. That added to concerns on Wall Street about demand for Apple's new devices after the launch on Friday of the iPhone 8, a less expensive model than the iPhone X, drew smaller crowds than previous launches.
Some investors saw the tepid iPhone 8 debut as a sign that customers were holding out for the iPhone X, which boasts an edge-to-edge display and will sell in the $999 (£999). But the news of scaling back in component supplies has led to a drop in share prices for the Cupertino-based firm. There have also been rumours in recent days that full production of Apple’s new handset had not yet begun.
Amid a broad selloff in technology shares on Monday, Apple's stock finished down 0.9 per cent. It earlier fell as much as 1.8 percent, bringing its loss since a record high on September 1 to 9 per cent. This brought the company close to what traders refer to as 'correction' territory.
Many investors define a correction as a 10 percent decline. A stock in correction may be viewed as either a buying opportunity or as likely to fall further. Wedbush trader Joel Kulina said of the drop: 'I'd buy Apple in this pullback.
'It's a high-priced product but super high-end.'
Apple’s stock recently traded at 13.8 times expected earnings, its lowest valuation since February, according to Thomson Reuters Datastream. Over the past two years, Apple’s average forward price-to-earnings ratio has been 12.6. Apple's early iPhone launches saw snaking queues of fans outside its stores, with many camping overnight to get their hands on the firm's latest devices.
But the iPhone 8 launches at Apple stores across the globe were a far cry from the hysteria on display seven years ago. There were just modest queues of iPhone fans photographed outside Apple's flagship stores today in London, Sydney, Amsterdam, and Shanghai. But many believe the imminent release of Apple's flagship £999 ($999) iPhone X overshadowed Friday's launch, with die-hard fans choosing to wait until it is available.
The iPhone X is scheduled to become available for pre-order starting Friday, October 27 in over 55 countries. And, Apple says it will hit the shelves on November 3. In an investor’s note obtained byBarron’s, Raymond James chip analyst Christopher Caso reveals iPhone X production is, as many have suspected, about a month behind schedule.
The rumors suggest it could be more difficult to get your hands on the device than expected.