It may be the smartphone of the moment, but a new leak reveals Apple AAPL -0.52%
In a new report obtained by AppleInsider, acclaimed KGI Securities’ analyst Ming-Chi Kuo says disappointing sales of the iPhone X will lead to the cancellation of the model “with production ceasing in the summer”. This would be the first time Apple has canceled an iPhone model after just one generation since the iPhone 5C in 2014.
Kuo, who has a long track record successfully revealing Apple’s plans, said lack of interest in China is the main reason. In China big screens are king and the iPhone X’s polarising "notch" is seen by Chinese consumers as removing too much usable space. Especially when the cheaper iPhone 8 Plus actually delivers slightly more.
The news also follows a new survey from Cowan that claims an interest in new iPhones has hit a historic low.
That said, it is not all doom and gloom. While the iPhone X will not bring Apple the much-anticipated sales "Super Cycle," Kuo states Apple will see modest 5% growth in the first half of 2018. This comes from Apple having three premium models (iPhone 8, iPhone 8 Plus, iPhone X) on sale for the first time.
Furthermore, Kuo believes Apple will enjoy a better end to 2018 with 10% growth as the outgoing iPhone X will be replaced by a total of three new iPhone X-inspired designs: a second generation 5.8-inch iPhone X, 6.5-inch iPhone X Plus and a “$650-750” 6.1-inch iPhone SE replacement which will be fitted with Face ID. Apple hopes it will be the latter two that once again excite the Chinese market.
It is worth noting none of the new models will have the reduced Face ID notch Apple is working on for 2019 iPhones.
Needless to say, Kuo’s report will likely result in declarations that Apple’s downfall is imminent, but to me this is ridiculous. For starters, the 5% and 10% growth figures actually stand in contrast to the global smartphone market, which is expected to shrink by 5% in 2018 as users hold onto their phones for longer.
Meanwhile, I’d argue it’s a smart move canceling the iPhone X because its design will remain a flagship option (the 6.1-inch model is priced like the iPhone 8) rather than being discounted at one year old. Consequently, the 2017 iPhone 8 and iPhone 8 Plus will then take the role of cheaper understudies bringing simplification to a range, that has become increasingly convoluted in recent years.
In short: this news is far from Apple’s biggest problem right now…
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