The iPhone 8 is expected to see a 50-60% decline this quarter thanks to consumer preference for the iPhone 8 Plus and iPhone X.
This prediction comes from analyst Min-Chi Kuo whose latest research for KGI Securities was obtained by MacRumors. He states that a lower than expected demand for the iPhone 8 means that the Apple supplier Pegatron, which assembles the device in Taiwan, should expect fewer orders.
“Pegatron — iPhone 8 production to decline 50-60% QoQ in 1Q18F on lower-than-expected demand: With fewer major selling points and given a consumer preference for iPhone 8 Plus on a limited price gap, we expect iPhone 8 production orders to see 50-60% QoQ decline in 1Q18F, potentially shrinking Pegatron’s utilization rate. But considering new iPhone orders may become more diverse (compared with a single model of iPhone 8 in 2H17), and assuming the new models will come with more compelling features than iPhone 8, we are positive on Pegatron’s growth momentum in 2H18F.”
Research from the firm Canalys stated this week that the iPhone 8 Plus outpaced the iPhone 8 last quarter with an impressive 6.3 million units versus 5.4 million units. This means that the iPhone 8 Plus is the first Plus-sized iPhone to out-ship it’s smaller counterpart in a single quarter.
Apple never discloses iPhone sales on a model-by-model basis but chief executive Tim Cook said that the iPhone 8 has “gotten off to the fastest start of any Plus model”, which has come as a “bit of a surprise” to the company.
Demand for the iPhone X remains positive and Kuo estimates that production will rise somewhere around 35-45% in the next quarter compared to to the one previous. This should help to alleviate supply constraints during the holiday season. However, there’s still expected to be a 3-4 week shipping delay online and limited in-store availability.
Kuo also said that Apple’s primary manufacturer Foxconn will convert iPhone 8 Plus production lines to iPhone X lines in late 2017 so that additional orders can be fulfilled. Regardless of this, it remains unlikely that Apple will achieve supply-demand balance until 2018.
