Apple shares fell more than 2.5% on Tuesday amid concerns that demand for the new iPhone X may not be living up to expectations.
The radically redesigned iPhone X’s $1,000 price point has been viewed as possibly deterring consumers from giving Apple the boost it was hoping for after a couple of years of sinking sales.
Early sales reports were positive, with Morgan Stanley reporting last week that the iPhone X is especially hot in China, but a wave of bearish analyst reports this week helped drive Apple stock down 2.57% to $170.52 in trading Tuesday — on track for the worst single-day percentage fall since Aug. 10.
Investors also punished the shares of companies that make iPhone components, with Genius Electronic Optical, which makes iPhone lens modules, down by more than 11% this week. Pegatron and Lumentum fell by 3%, Finisar and Skyworks by 2%, and Foxconn by 1%.
Citing the iPhone X’s super-high $1,000 price and confusing features, Chinese broker Sinolink Securities predicted that Apple will ship just 35 million iPhone X devices in the first three months of 2018, roughly 10 million fewer than previously expected.
Another broker, U.S.-based JL Warren Capital, is predicting shipments of just 25 million units as consumers balk at the “high price point and a lack of interesting innovations.”
The analyst reports came after Taiwan’s Economic Daily newspaper reported that Apple will slash its first-quarter sales forecast to 30 million units from its initial plan of 50 million. It also said Foxconn, the sole iPhone X assembler, had stopped recruiting workers at its main manufacturing hub in Zhengzhou, China.
Apple CEO Tim Cook said in November that orders for the iPhone X have been “very strong” and, as CNN reports, the 2017 holiday shopping season was likely Apple’s best ever, with analysts predicting the company sold as many as 90 million iPhones over the past three months.
The estimate adjustments for the iPhone X “could be attributed to previously very bullish views on the iPhone X cycle,” analyst Jun Zhang of Rosenblatt Securities wrote.