Shares of Apple were down nearly 2.5 percent Thursday afternoon, following a dismal growth forecast from Apple’s biggest processor supplier. Taiwan Semiconductor Manufacturing Co (TSMC) predicted that sales for the current quarter would be $1 billion less than previously forecasted, which virtually confirms previous rumors that Apple has dramatically scaled back iPhone X production.
JPMorgan Chase & Co. analyst Gokul Hariharan blamed the miss on the iPhone, according to Bloomberg. “He estimated that, quarter on quarter, the company’s Apple-related revenues may plunge roughly 50 percent in the second quarter after a 30 percent drop in the first period.”
Other analysts are equally gloomy about Apple’s iPhone sales. RBC Capital Markets analyst Amit Daryanani said “we note, based on our past channel checks with suppliers, that current production expectation for new iPhones is ~80-90M units for second half calendar 2018, which is below suppliers’ expectation of ~100-120M units for iPhone 8/X in early 2017.”
However, it’s not all total doom-and-gloom for Apple. While every agrees that sales volume is lackluster, the sheer number of sales are no longer the most important thing. Daryanani said that the reason behind the production slowdown could be that “AAPL may work to curtail its iPhone channel inventory aggressively ahead of the fall 2018 product launches, especially as we think AAPL will launch all its devices this September (vs. doing a staggered launch).”
Most importantly, however, the high price point of the iPhone X is keeping Apple’s bottom line looking healthy. As a Counterpoint study showed earlier this week, the iPhone X alone made a little more than three times as much money as the total profits from Samsung, LG, HTC, Sony, OnePlus, Huawei, and Xiaomi combined.