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December 27, 2017

Apple got a bummer of a Christmas present, cuts iPhone X expectations

by John_A

Plenty of Apple devotees will have woken up to an iPhone X under their tree on Christmas Day, but perhaps not as many as previously expected. Wall Street analysts have lowered projections for the amount of devices set to be shipped in the first quarter of 2018, citing diminished demand toward the end of the holiday season.

Zhang Bin of Sinolink Securities suggested that iPhone X shipments for the first quarter of 2018 could come in at 35 million, some 10 million fewer than previously estimated. JL Warren Capital echoed this standpoint, predicting that 25 million devices would be shipped over the period, according to Bloomberg.

Pricing seems to be the sticking point for the iPhone X. At $1,000, it is undoubtedly a luxury purchase, but some would argue that it simply doesn’t offer the innovation that might be expected from such a price tag.

The iPhone X is something of a critical darling — the Digital Trends review of the device called it “the iPhone to buy this year” — but this hasn’t necessarily translated to blockbuster sales. It seems that once the most dedicated Apple fans made the upgrade, interest in the smartphone has cooled significantly.

Apple slashed its internal forecast for sales in the first quarter of 2018 from 50 million to 30 million. The company has enjoyed a reprieve from its rivalry with Samsung as its biggest competition in the smartphone market recovers from the Galaxy Note 7 recall, but competition is heating up once again.

Given that consumers seem to favor Apple’s less expensive iPhone models, it will be interesting to see whether the company moves to introduce some of the new features exclusive to the iPhone X across its other devices. Its facial recognition functionality seems to be the most likely candidate — animoji might be something of a novelty, but Face ID feels like a genuine step forward, despite its limitations in its current form.

Even if the iPhone X is underperforming, Apple is by no means in trouble, with the company’s market value well on its way to the $1 trillion mark. Still, the cutthroat smartphone market is in a constant state of flux, so Apple’s 2018 offerings will need to be compelling if it is to remain on top.

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