Investors are beginning to question Apples Staggered Strategy for releasing its latest phones.
The Apple Inc’s shares fell by a reasonable 3% on Thursday. All this was caused by the signs of weak iPhone 8 demand. iPhone is or at least was one one of the most exclusive and famous brands in the world.
There are a few things that have caused the decrease in demand. Some of this things are high price tags could be the reason why this happened.
In Canada and the United States, wireless carriers have reported that customer upgrades hit a slow 3/4. The anticipation is slowing down in the areas which analysts have noted.
The pricier iPhone X is being released on November 3rd, and there are still concerns on the expected sales report. On Thursday The chief executive of Rogers communications which are Canada’s most extensive mobile network said that there had been a decrease in the sales of the iPhone 8 and Phone 8 plus.
However, the iPhone 8 did quite well after its launch.
The weak sales on the iPhone 8 sales may not hurt the general iPhone revenue.
This is because users and loyal buyers could still be buying the older iPhone models. However, all this is speculation made by some analysts.
Also, they have expressed concerns about the overall iPhone production being in line with earlier expectations.
According to Verizon Communications Inc’s Chief financial officer Matt Ellis, the upgrades have suffered as compared to other years. However, they expect an increase in updates after the launch of the iPhone X.
Ellis told an earnings call that there is a thing happening whereby there are differences in timing when for companies releasing new devices. It is very different as compared to all the other years and phone releases. The holiday season sees a lot of sales in phone upgrades and purchases. There is going to be an increased demand for the phone as the holidays the holidays.
All the talk about the demand being low or high paired with a Taiwan media report has affected the company. The Taiwan report states that there is a cut in iPhone 8 production. All these things pushed Apple shares down by 2.8% by the half of that day.
The chief strategy officer at the GBH Insights in new york Daniel Ivens said that the street is hypersensitive. Sensitive to any slight speed bumps around the next iPhone cycle. He explains that this is the reason there is a kneejerk reaction in shares.
The iPhone brand is very huge, and the iPhone 8 demand has a naturally being high but the main launch being the November iPhone X release. The U.S wireless carrier AT&T reported that there was a lower demand with a nearly 900,000 as compared to the previous year.
The Supply Chain
The Apple company doesn’t give constant updates on the sale numbers as they did before.
The way to know how the sale is doing is through wireless carriers and loyal analysts. Apple announced that they were releasing both iPhones before the year ends. Fans were not happy as they have to wait until November for the very anticipate iPhone X.
However, there have been concerns that the marking of iPhones ten the anniversary may affect the prices. It could reduce the hype that the Apple launches usually receive.
A particular survey suggested that the cheaper iPhone 7 was selling out more just before the iPhone 8 launch. Wayne Lam, an analyst with the IHS, says that it is hard to gauge the iPhone profits and revenue from the different model sales.
Apple earns a lot of margins from customers when they switch to higher memory services. He adds that there is always room for improvements on iPhones regarding making profits.
There have been concerns that the high prices of the iPhone X could discourage different carriers from stocking the phones. It will in return affect the customers from buying the phones.
Apples starting price is $999 which can be expensive for some people. The iPhone brand has a considerable following and buyers line up to get the new models it will not be much different for the iPhone X.
Reading reviews can be constructive for people who are looking to get the new phone.
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