Apple Inc’s shares dropped 1.5 percent in during premarket trading on Thursday as traders and brokers questioned the low demand and reductions in the production of Apple’s latest smartphone launch the iPhone 8. This is most likely due to the anticipation of the November launch of the 10th anniversary iPhone X.
Apple does not provide regular sales updates but indications from those who tract the sector have reporting poor sales for the iPhone 8. John Vinh, an analyst, earlier this week had reported that a carrier store survey indicated that the iPhone 7 was outselling the new phone just a month after the launch. In a Taiwan-based newspaper Economic Times, analysts mentioned in a report that a source spoke on a 50 percent decline in orders for the iPhone 8.
The iPhone X will go on sale from Nov. 3 and is also contributing to the demand. It is believed that Apple has put more emphasis on iPhone X, which looks completely different with an edge-to-edge display. With retail from $999 it will increase the company’s margins.
Analyst Jun Zhang believes Apple all together stop iPhone 8 production and move towards the iPhone X as the phone is anticipated to quickly sell out. “Our research suggests the production mix was 50/50 between iPhone 8/8 Plus and the iPhone X, but iPhone X allocation could shift up to 60-70 percent in December and even more in the March quarter,” said Zhang.
Deutsche Bank analysts, however, played down the importance of any cut in iPhone 8 production in favor of iPhone X.
“We think the market could have over-focused on the production swing in different SKUs, but overlooked that the overall iPhone production is largely on track,” according to Deutsche Bank analysts.
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Adding, “We still expect Hon Hai, Pegatron and Wistron to account for 68%-70%, 24%-26% and 5%-6% of total production in 4Q17 (similar to 3Q17). Pegatron and Wistron should take more iPhone 8/8Plus orders, while Hon Hai is shifting its resource to iPhone X.”
Pegatron Corp shares fell 2.7 percent and Wistron Corp fell 1.2 percent in the Taiwan Stock Exchange. Hon Hai shares increased 1.35 percent.
Shares of Apple were trading down $2.46, or 1.5 percent, at $157.30 in premarket trading on the Nasdaq.