Earlier last month, we came across a report which stated that Apple had cut down on iPhone XR production as demands for older models rose. Well now, popular analyst Ming-Chi Kuo – who has been accurate with his predictions in the past – has predicted that global sales of iPhone could decline by up to 10% next year.
Initially, annual iPhone shipments were predicted to be around 212 Million units, which have now gone down up to 10% in the range of 188 to 194 Million units. Kuo had also initially estimated shipment of 47 – 52 Million units of iPhone in Q1 of 2019, but now, that estimate has gone down by 20% to 38 – 42 Million units.
The reason for reduced iPhone shipment estimates is lower-than-expected demand of iPhone XR which is the cheapest iPhone among the new iPhone models launched this year. Kuo had previously estimated a shipment of 20 – 25 Million units of the iPhone XR, but now, that estimate has gone down to 15 – 20 Million units.
“The increase in orders of legacy iPhone models cannot offset the decline of XR and XS series shipments because of the low season impact,” said Kuo.
With that being said, Apple’s revenue from the sale of iPhone is unlikely to take a big hit due to reduced shipments, and that’s because of the higher prices of the new iPhone models. A higher average price will offset reduced sales.
“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,” said Kuo.
Apple has already announced that it will no longer reveal iPhone sales figures, hence, the only way for analysts and investors to determine iPhone sales is by taking a look at iPhone sales revenue.
Ever increasing iPhone prices have deterred even the most loyal iPhone fans from buying the latest iPhone models, and, we have personally seen people buying older models like the iPhone 8/8 Plus, and even the iPhone 7/7 Plus instead because of their comparatively lower prices.