Apple has a bit of a problem with its iPhone. And its silence on the topic is making matters worse.
Over the last several days, analysts have said that Apple’s iPhone X, as well as its broader iPhone division, are suffering from lower-than-expected sales. One analyst went so far as to say that the iPhone X is “dead.”
Those reports, however, followed a study from Counterpoint Research that suggested Apple’s iPhone X captured more profits in the fourth quarter than any other handsets. What’s more, all iPhone models combined to generate 90% of the smartphone market’s profits.
So, is the iPhone, and more specifically the iPhone X, in trouble? The only one who knows is Apple. And at least so far, it’s not talking.
Alas, there’s nothing left to do but talk about that and all the other Apple news from the past week. Read on for more:
- In a note to investors this week, Mirabaud Securities analyst Neil Campling said that “the iPhone X is dead” and Apple will have no choice but to “discontinue” the handset this year. He cited a report from Apple manufacturing partner Taiwan Semiconductor (TSMC) that suggested its iPhone inventory is “at record highs.” Speaking to CNBC on Friday, Campling said the iPhone X’s problem is that it’s “too expensive.”
- In notes to investors on Thursday, both Bank of America Merrill Lynch and J.P. Morgan analysts said Apple’s iPhone sales are slumping and could have been below the Street’s expectations during the last quarter. The analysts based their findings on TSMC’s acknowledgment this week that second-quarter revenue will range between $7.8 billion to $7.9 billion. Analysts had expected second-quarter sales of $8.8 billion. While TSMC didn’t cite Apple by name, the company, which derives a large portion of its revenue from the iPhone, said the mobile market is suffering from “weak demand.”
- All of that apparent bad news came after Counterpoint Research revealed this week that Apple’s iPhone X captured 35% of the smartphone market’s profits during the fourth quarter. Apple’s iPhones collectively captured 90% of smartphone profits during the period. Even if the iPhone’s sales are off, in other words, no other company can generate a profit like Apple.
- Apple will release three new iPhones this year, including one that will cost just $550, KGI Securities analyst Ming-Chi Kuo said this week. The analyst, who has a strong track record of predicting Apple’s plans, said that the cheapest iPhone to be released this year will come with a 6.1-inch LCD screen. It’ll also have a design similar to that of the current iPhone X, which costs $999. Kuo added that the cheap iPhone could have a dual-SIM feature that would help users easily connect to international carrier networks.
- Earlier this year, Apple acquired a news startup called Texture that allowed users to access up to 200 magazines for just $9.99 a month. Bloomberg reported this week that Apple will launch a similar service built on the Texture platform later this year. The subscription service would be built into Apple News and allow users to subscribe to the media outlets they want to read. Apple and the media outlets would ostensibly share in the monthly revenue stream.
One more thing…Former FBI Director James Comey wrote in his book A Higher Loyalty that was released this week that both Apple and Google “drove me crazy”over their stance on encryption and privacy. He added that the companies and others in Silicon Valley “don’t see the darkness” that the FBI sees.