Apple Shares Tank, iPhone 8 Demand Below iPhone 7
Shortly after Apple admitted that they had problems with their new Series 3 Watch it was revealed that demand for the new iPhone 8 is “substantially lower” than for earlier models, share in the Company fell by over 3%.
ChannelNews has been told by both an Australian carrier and a major retailer of Apple products that pre order demand for the iPhone 8 is “significantly lower” than what was expected.
According to Bloomberg, pre-order volumes in the U.S. for the iPhone 8 fell below those for the iPhone 7 and iPhone 6, Rosenblatt Securities analyst Jun Zhang said in a note to clients. Demand in China is even lower, the analyst said. Zhang has a neutral rating on Apple shares.
The stock fell as much as 3.1 percent, the most since Aug. 10. It was down 1.9 percent to $155.65 at 3:46 p.m. in New York.
The iPhone 8 was unveiled last week alongside the iPhone X, which incorporates many more new features. While the 8 becomes available in stores on Sept. 22 for upwards of $1,400, the iPhone X will not be available until November and will cost at least $1,899. The top-of-the-range model includes a facial recognition system that uses a 3-D scanner to unlock the handset, replacing the fingerprint sensor in the iPhone 8 and other earlier models.
“We understand this does not reflect the iPhone 8 cycle as a whole since the iPhone X has not yet officially launched, but we are concerned,” Rosenblatt’s Zhang said in the note. IPhone 8 production might need to be reduced and “the iPhone X production ramp might not be able to meet demand in December and March quarters,” Zhang said.
Apple forecast sales of between $49 billion and $52 billion in the three months through September, a projection investors understood to signal resilient iPhone demand. The later release date of the iPhone X had already been taken into account when the company made that forecast in August, spokeswoman Kristin Huguet said last week.
Apple also acknowledged a problem with its new Apple Watch Series 3, which hits stores on Friday and features its own cellular connection for the first time. Some reviewers found that when the device connects to Wi-Fi networks requiring further authentication, the cellular service sometimes drops. Apple said it is “investigating a fix for a future software release.”