The big problem with the iPhone X
IT was meant to be the smartphone that changed the way we communicate forever.
But it appears that the iPhone X - Apple's most expensive phone - has hit a wall as company shares took a tumble and sales expectations were down.
Wall Street's main indices are facing pressure today following a 2.8 per cent drop in Apple's shares on a report of weak iPhone X demand.
Apple will slash its sales forecast for its flagship phone in the current quarter to 30 million units, down from what it said was an initial plan of 50 million units, Taiwan's Economic Daily reported, citing unidentified sources.
That, along with some bearish brokerage calls on iPhone X demand, put its shares on track for their worst single-day per centage fall since August 10.
Shares of companies that supply parts to Apple, including Broadcom, Skyworks Solutions, Finisar and Lumentum Holdings, also took a hit as they fell between 1.8 per cent and 3.5 per cent.
The slump comes after early sales reports were positive across the globe, and Morgan Stanley reported last week that the iPhone X was very popular in China.
But a Reuters analysis of Chinese social media shows that interest in the iPhone X - which peaked around the phone's launch - has not kept pace with the iPhone 6 released in 2014.
There were only 4.97 million Weibo posts mentioning the iPhone X so far in December compared to over 11 million for the iPhone 6 in the equivalent period in 2014, the analysis showed.
While Apple has not officially released iPhone X sales figures, it is believed that the phone's hefty price tag of between $1579-$1829 was a deterrent for buyers.
Apple is also facing competition from Samsung, which is recovering from the Galaxy Note 7's worldwide recall after fires. Chinese brands such as Huawei, Oppo and Xiaomi are also fighting for customers in China and other emerging markets, Bloomberg reports.
A Sinolink Securities analyst has also predicted that Apple will ship just 35 million iPhone X devices in the first three months of 2018, CNN Money reports.
This is 10 million less units than previously expected.
JL Warren Capital also estimates Apple will deliver just 25 million iPhone Xs.
The drop shows "weak demand because of the iPhone X's high price point and a lack of interesting innovations," the research firm said in note to clients.
"Bad news here is that highly publicised and promoted X did not boost the global demand for iPhone X," according to the note.
Others were more confident, saying they expected Apple to ship around 40 million units.
Analysts at Jefferies have also forecast around 40 million iPhone X sales for the first quarter.
"Our work continues to suggest the March and June quarters will have a significant amount of iPhone X make-up shipments," Chicago-based Loop Capital said in a note last week, forecasting shipments of 40-45 million units in the first quarter of 2018.
Apple is yet to comment on speculation surrounding its future production of the iPhone X.