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World’s most accurate Apple insider says iPhone XR demand is surprisingly weak

December 14th, 2018 at 12:02 PM
iPhone XR

The negative stories surrounding iPhone XR sales keep on rolling in. Despite Apple revealing that the iPhone XR has remained the top-selling iPhone model since launch, and despite reports that Apple’s manufacturing partners saw substantial revenue growth in November, it’s impossible to ignore the sheer number of reports pointing to somewhat disappointing demand for the entry-level iPhone XR.

The latest news comes from reputed analyst Ming-Chi Kuo who recently issued a research note (via MacRumors) claiming that iPhone XR demand is below expectations. Put simply, the iPhone XR isn’t spurring an avalanche of upgrades as many initially predicted. As a result, Kuo anticipates that Apple during the first quarter of 2019 will sell anywhere from 38 to 42 million iPhones, a steep decline from his initial projection of 47-52 million units.

As for Apple’s other iPhone models, sales of the iPhone XS are presumably in line with expectations. And though there are reports that older iPhone models like the iPhone 8 are selling better than expected, Kuo doesn’t believe that will sufficiently offset what appears to be surprisingly weak demand for the iPhone XR.

That notwithstanding, Kuo relays that there is a chance iPhone revenue could still increase year over year thanks to Apple’s margin-friendly XS models. Indeed, Apple during its last earnings report saw iPhone revenue jump by an astounding 29% even though year-over-year sales essentially remained stagnant. From this perspective, it is impressive that Apple has figured out a way to boost revenue even in the face of disappointing iPhone upgrade numbers.

In the wake of Kuo’s note, shares of Apple — which are currently hovering in the $167 range — are essentially trading at a 12-month low. And with analysts still laser focused on iPhone sales, it may be a while before the stock rebounds in a meaningful way. In the interim, it stands to reason that Apple is buying up as many of its own shares as it can as part of its increasingly ambitious capital return program.

A life long Mac user and Apple enthusiast, Yoni Heisler has been writing about Apple and the tech industry at large for over 6 years. His writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and most recently, TUAW. When not writing about and analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions, the most recent examples being The Walking Dead and Broad City.

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