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.

iphonexr
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.

iphone xr apple homepage
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

MacFather Avatar
29 months ago
Deleted.
Score: 70 Votes (Like | Disagree)
cristianvaldez Avatar
29 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)
Pepe4life Avatar
29 months ago
Next up:
iPhone XR for $99*

*after kidney trade-in
Score: 56 Votes (Like | Disagree)
newyorksole Avatar
29 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)
usersince86 Avatar
29 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)
newdeal Avatar
29 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

microsoft edge ios android

Bill Gates Says His Preference for Android Over iPhone is Due to Pre-Installed Software

Friday February 26, 2021 3:35 am PST by
Microsoft co-founder Bill Gates this week participated in his first meeting on Clubhouse, the increasingly popular invite-only conversation app, where he fielded a range of questions as part of an ongoing book tour. Gates was interviewed by journalist Andrew Ross Sorkin, and given that the Clubhouse app is currently only available on iOS, naturally one of the questions that came up was...
Top Stories 47 Feature copy

Top Stories: MacBook Pro, iMac, and AirPods Rumors, macOS 11.2.2, MagSafe Wallet Revisited

Saturday February 27, 2021 6:00 am PST by
March is right around the corner, and that means our first good opportunity for Apple product launches in 2021 as the company frequently has significant launches in March or April each year. We're hearing rumors about MacBook Pro, iMac, AirPods, and more, although many of these will be coming out at different times over the course of the year. This week also saw a macOS update to address a ...
iphone 6 in hand

Apple Faces Another iPhone Lawsuit Over 'Programmed Obsolescence'

Monday March 1, 2021 6:44 am PST by
Apple faces a new class-action lawsuit that accuses it of deliberately releasing iOS updates that slowly reduce the performance of an iPhone, forcing customers to upgrade their devices. The lawsuit comes from the Portuguese Consumer Protection Agency, Deco Proteste (via Marketeer), which in a statement says that it will proceed with a case against the Cupertino tech giant because it...
maxresdefault

HomeKit Essentials Worth Checking Out

Saturday February 27, 2021 7:05 am PST by
HomeKit was slow to take off after its 2014 launch, but now that it's been around for seven years, there are hundreds of HomeKit products available, ranging from doorbells and speakers to TVs, lights, and cameras. In our latest YouTube video, we rounded up some of our favorite HomeKit products that we find most useful. Subscribe to the MacRumors YouTube channel for more videos. HomePod...
First Look Big Sur Feature2

Apple Releases macOS Big Sur 11.2.2 to Prevent MacBooks From Being Damaged by Third-Party Non-Compliant Docks

Thursday February 25, 2021 10:07 am PST by
Apple today released macOS Big Sur 11.2.2, the fourth update to the macOS Big Sur operating system that launched in November. macOS Big Sur 11.2.2 comes two weeks after the release of macOS Big Sur 11.2.1, a bug fix update. The new ‌‌‌‌macOS Big Sur‌‌‌ 11.2.2‌ update can be downloaded for free on all eligible Macs using the Software Update section of System Preferences....
iphone 12 pro display video

iPhone 13 to Include 1TB Storage Option and LiDAR Across the Board, Says Wedbush Analyst

Monday March 1, 2021 4:00 am PST by
Apple's forthcoming iPhone 13 could include a 1TB storage option for some models and LiDAR Scanners across the entire lineup, according to a report from Wedbush analysts. In a new note to investors, seen by MacRumors, Wedbush analyst Daniel Ives said that initial Asian supply chain checks gave the firm "increased confidence" that Apple's 5G-driven product cycle would extend well into 2022,...
flat mbp 14 inch feature yellow

Redesigned 14-Inch MacBook Pro Expected to Feature Brighter Mini-LED Display With Slimmer Bezels and More

Thursday February 25, 2021 7:48 am PST by
Apple plans to unveil new 14-inch and 16-inch MacBook Pro models with Mini-LED-backlit displays in the second half of this year, according to industry sources cited by Taiwanese supply chain publication DigiTimes. The report claims that Radiant Opto-Electronics will be the exclusive supplier of the Mini-LED backlight units, while Quanta Computer is said to be tasked with final assembly of the...
mac mini developer transition kit photo feature

Apple Requiring Developers to Return DTK Mac Minis by March 31

Friday February 26, 2021 3:57 pm PST by
Apple today sent out emails to developers who are in possession of a Developer Transition Kit, asking them to return the machines by March 31. The Developer Transition Kits are Mac minis with A12Z chips that Apple provided for development purposes ahead of the release of the M1 Macs. Apple in the emails provided developers with shipping instructions, and plans to begin collecting the DTKs...
iphone 12 120hz thumbnail feature

Kuo: iPhone 13 Lineup to Feature Smaller Notch and Larger Batteries, 120Hz Display for Pro Models, and More

Monday March 1, 2021 7:50 am PST by
iPhone 13 models will all feature a smaller notch, while the two Pro models will be equipped with low-power LTPO display technology for a 120Hz refresh rate, analyst Ming-Chi Kuo said today in a research note obtained by MacRumors. Subscribe to the MacRumors YouTube channel for more videos. Several other sources have previously claimed that some iPhone 13 models will support a 120Hz refresh...
unc0ver version 6 release

Jailbreak Tool 'unc0ver' 6.0.0 Released With iOS 14.3 Compatibility

Sunday February 28, 2021 9:26 am PST by
The team behind the "unc0ver" jailbreaking tool for iOS has released version 6.0.0 of its software, which can allegedly be used to jailbreak any device running iOS 11.0 through iOS 14.3 using a kernel vulnerability. The unc0ver website describes how the tool has been extensively tested across a range of iOS devices running various software versions, including an iPhone 12 Pro Max running iOS ...