Ming-Chi Kuo Says iPhone XR Demand Has Been Lower Than Expected, Slashes Shipment Estimates

iPhone XR demand has been lower than expected, according to Apple analyst Ming-Chi Kuo, who has slashed his overall iPhone shipment forecast by 20 percent for the first quarter of 2019. He now expects Apple to move 38-42 million iPhones in the quarter, down from his original estimate of 47-52 million.


Kuo, in a research note with TF International Securities, obtained by MacRumors:

We have reduced our 1Q19 iPhone shipment estimation by 20% to 38–42mn units (vs. our previous forecast of 47–52mn): We cut the 1Q19 iPhone shipment estimation again for the following reasons. (1) Lower-than-expected XR demand. We have reduced our 1Q19 XR shipment estimation to 15–20mn units vs. our previous forecast of 20–25mn units. (2) The increase in orders of legacy iPhone models cannot offset the decline of XR and XS series shipments because of the low season impact.

Apple reported sales of 52.2 million iPhones in the first quarter of 2018, which corresponds with the second quarter of Apple's fiscal year, so as few as 38 million units in the first quarter of 2019 would be a significant year-over-year decline.

For the iPhone XR in particular, Kuo has revised his shipment estimate to 15-20 million for the first quarter, down from 20-25 million.

Kuo estimates annual iPhone shipments will fall between 205 million and 210 million in 2018, and based on that, forecasts that annual iPhone shipments in 2019 will decline up to 10 percent to a range of 188 million to 194 million. This would fall below Wall Street's consensus estimate of around 212 million units in 2019.

While this news paints a pessimistic outlook for the iPhone, declining unit sales will likely be at least partially offset by the rising average selling price of iPhones. Apple's latest iPhone lineup is its most expensive yet, with the $349 iPhone SE discontinued and the iPhone XS Max topping out at $1,449 with 512GB of storage.

Kuo:

We believe that the iPhone ASP could at least keep growing YoY until 3Q19, and it will offset the YoY shipment decline. However, most suppliers will face growth challenges due to iPhone shipment decline. We believe that specific suppliers can grow, thanks to the component price increase or the ability to obtain new orders, but the visibility of the beneficiary list will not be clear until 1Q19 because some spec and order allocations of 2H19 new iPhone models are not confirmed yet.

Apple will no longer be disclosing unit sales in its quarterly earnings reports going forward, so investors will have to look towards iPhone revenue to determine how well the handset is selling. If unit sales are particularly bad, then a rising average selling price might not be enough to hide the weakness.

Apple has been aggressively marketing its latest iPhones. On its website, for example, the iPhone XR and iPhone XS take up the entire homepage with advertised starting prices of $449 and $699 respectively. However, each have an asterisk that leads to fine print that says pricing is based on an iPhone 7 Plus trade-in.


Apple's earnings results for the first quarter of 2019 will likely be released in May, so we're still some time away from real numbers.

Related Roundup: iPhone XR

Top Rated Comments

(View all)
Avatar
21 months ago

Decrease the price (and/or the size) and sales will increase.

And don't make us trade in a phone.

The price is not the only factor. Many people simply don't want to carry a flat-screen television in their front pocket.



Score: 70 Votes (Like | Disagree)
Avatar
21 months ago
The greed in price increases is starting to take a toll. They should lower the prices or people are going to switch to Android or look somewhere else.

Apple needs more innovation and less greed. Go back to Steve Jobs days maybe?
Score: 56 Votes (Like | Disagree)
Avatar
21 months ago
Next up:
iPhone XR for $99*

*after kidney trade-in
Score: 56 Votes (Like | Disagree)
Avatar
21 months ago
Jeez. Apple Stores also have easels holding up a poster about “XR starting at $449”. Never seen some type of promo like that.

I really hope they learned their lesson this year. Sheesh.
Score: 49 Votes (Like | Disagree)
Avatar
21 months ago
Decrease the price (and/or the size) and sales will increase.

And don't make us trade in a phone.
Score: 48 Votes (Like | Disagree)
Avatar
21 months ago
Hopefully Tim Cook can have a good idea as to where to go next. Releasing new products at higher prices than the old products and keeping the old products available around the same price didn't really seem like a thing that Jobs did. Generally if they were releasing a computer or a phone it was the same price or lower and then if they kept the old one around they would drop the price. Doesn't seem to be happening anymore.
Score: 28 Votes (Like | Disagree)

Top Stories

iPhone 12 Sizes Compared with iPhone SE, 7, 8, SE 2, X, 11, 11 Pro and 11 Pro Max [Update]

Tuesday July 7, 2020 6:49 pm PDT by
Apple is planning on launching the iPhone 12 this fall which is rumored to be coming in 3 different sizes: 5.4", 6.1" and 6.7". The middle size (6.1") matches up with the currently shipping iPhone 11, but the other two sizes will be entirely new. Over the weekend, there was some excitement about how well the new 5.4" iPhone 12 compares to the original iPhone SE. Those who have been hoping...

Everything New in iOS 14 Beta 2: New Calendar Icon, Files Widget and More

Tuesday July 7, 2020 11:38 am PDT by
Apple today released the second beta of iOS 14 to developers for testing purposes, tweaking and refining some of the features that are coming in the update. Below, we've rounded up all of the changes that we found in the second beta. - Calendar icon - There's a new Calendar app icon in iOS 14 beta 2, with the day of the week abbreviated rather than spelled out. - Clock icon - The clock...

Apple Warns Against Closing MacBooks With a Cover Over the Camera

Friday July 10, 2020 11:12 am PDT by
Apple this month published a support document that warns customers against closing their Mac notebooks with a cover over the camera as it can lead to display damage. Image via Reddit Apple says that the clearance between the display and the keyboard is designed to very tight tolerances, which can be problematic. Covering the camera can also cause issues with automatic brightness and True Tone....

Analyst Believes iPhone 12 Pricing Will Start $50 Higher Even Without EarPods or Charger in Box

Wednesday July 8, 2020 9:35 am PDT by
Despite multiple reports indicating that Apple will not include EarPods or a wall charger with iPhone 12 models this year, one analyst believes that pricing will still increase slightly compared to the iPhone 11 lineup. In a research note provided to MacRumors, analyst Jeff Pu forecasted that iPhone 12 pricing will start at $749 for a new 5.4-inch model, an increase of $50 over the base...

Apple Seeds First Betas of iOS 14 and iPadOS 14 to Public Beta Testers

Thursday July 9, 2020 10:14 am PDT by
Apple today seeded the first public betas of upcoming iOS and iPadOS 14 updates to its public beta testing group, two weeks after first providing the updates to developers after the WWDC keynote and a day after seeding the second developer betas. Public beta testers who have signed up for Apple's beta testing program can download the iOS/‌iPadOS‌ 14 updates over the air after installing ...

14-Inch MacBook Pro With Mini-LED Display Expected to Enter Production in 2021

Wednesday July 8, 2020 7:51 am PDT by
Apple suppliers will begin competing to win manufacturing orders for new 14-inch and 16-inch MacBook Pro models with Mini-LED displays in the first quarter of 2021, according to Taiwanese research firm TrendForce. Rumors of a 14-inch MacBook Pro have surfaced since Apple replaced the 15-inch MacBook Pro with a new 16-inch model last year. Apple analyst Ming-Chi Kuo has previously said that...

Leaker: 'iPhone 12 Pro' to Come With 6GB of RAM

Friday July 10, 2020 1:59 am PDT by
Later this year, Apple is expected to release four OLED iPhones in three display sizes, including 5.4, 6.7, and two 6.1-inch models. Rumors suggest the 6.7-inch iPhone and one 6.1-inch model will be higher-end devices, and now leaker @L0vetodream has corroborated previous rumors about the internal specs of Apple's upcoming lineup. Rumors suggest Apple will use 5-nanometer A14 chips in its...

Developer's Visual Comparison of macOS Catalina and Big Sur Offers Closer Look at Apple's UI Redesign for Macs

Tuesday July 7, 2020 4:00 am PDT by
macOS 11 Big Sur is the next major release of Apple's operating system for Mac, and following its preview at WWDC, one of the biggest discussions has revolved around the all-new user interface redesign. Developers are still learning what the impact the new UI will have on their apps, and with that in mind, app designer Andrew Denty has compiled an extensive visual comparison of the user...

Apple's Arm-Based Macs With Apple Silicon Chips Will Support Thunderbolt

Wednesday July 8, 2020 3:14 pm PDT by
Apple is working on Macs that use its custom Apple-designed Apple Silicon chips instead of Intel chips, but Apple has committed to continuing to support Thunderbolt, reports The Verge. In a statement, an Apple spokesperson said that Apple's upcoming machines will offer support for Intel's Thunderbolt USB-C standard. "Over a decade ago, Apple partnered with Intel to design and develop...

Kuo: Apple Silicon Macs to Include 13-inch MacBook Pro and MacBook Air This Year, 14.1-inch and 16-inch MacBook Pro Models Next Year

Friday July 10, 2020 2:58 am PDT by
At last month's WWDC, Apple officially announced that its Mac computers will be transitioned from Intel x86 to homegrown Apple Silicon chips. Apple said it plans to deliver the first Apple Silicon Mac by the end of the year and complete the transition in about two years. According to Apple analyst Ming-Chi Kuo, a 13.3-inch MacBook Pro with a form factor similar to the current 13.3-inch...