Apple’s New iPhones Have A Serious Problem

Apple’s New iPhones Have A Serious Problem

They may ship with some great secret features, but Apple AAPL +2.47%’s new iPhone XS (details), iPhone XS Max (details) and iPhone XR (details) are widely assumed to be in trouble and it has hammered the company’s share price. Moreover, the problems are getting worse…

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In a new report, Bloomberg reveals Face ID component supplier AMS AG has been forced to slash its revenue estimates and the company (not so subtly) puts the blame on one company in particular.

AMS revised its Q4 2018 revenue estimates down from highs of $610M to new lows of $480 citing “recent demand changes from a major consumer customer.” AMS is the latest in a string of iPhone suppliers to announce revenue cutbacks. These include primary iPhone assembler Hon Hai, screen supplier Japan Display and AMS’s fellow Face ID supplier Lumentum Holdings.

While Hon Hai has been the primary focus, the fact Apple’s new iPhones are the first to use Face ID across the range (only the iPhone X used it last year) should have meant Face ID component suppliers stood to benefit most of all this year. But clearly, that’s not panning out.

“Many suppliers have lowered numbers because of their unnamed ‘largest customer,’ which is Apple,” Elazar Capital analyst Chaim Siegel told Reuters.

And, in truth, the signs have been coming.

 

Last month, I highlighted the mystery surrounding iPhone XR sales. Widely tipped to outsell the iPhone XS and iPhone XS Max combined, the iPhone XR took five days to sell out of its initial stock when historically Apple’s first batch goes in a few hours. Since then Apple has said it will no longer report iPhone sales numbers.

Also not helping are the increasing flaws in iPhone hardware. Last week Apple confirmed a serious hardware fault on the iPhone X and this means Apple has had to issue hardware warnings about four of the last five iPhone generations: iPhone X (details), iPhone 8 (details), iPhone 7 (details) and iPhone 6 (details).

Combine these problems with Apple’s ever-increasing iPhone prices, multiple software gliches and the decision of major carriers to delay eSim support for the new models, and I can understand why customers may not be rushing to upgrade.

That said if you are going to upgrade, I do believe the iPhone XR is the model to buy. It’s far from cheap, but the fact you can buy two 64GB iPhone XRs for just $50 more than one 512GB iPhone XS Max and get better battery life to boot says it all.

So if the iPhone XR isn’t selling either, then Apple really does have a problem…

 

 

Source:- forbes

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