A supply-chain source in Taiwan claims that Apple has reduced orders for both the iPhone 8 and iPhone 8 Plus by around 50% for November and December.
AAPL stock dropped by 1.5% in pre-market trading in response, and was done 2.37% by the end of the day …
EDN says this is the first time in the iPhone’s history that production has been cut so early in the cycle.
With iPhone X preorders not open, reduced demand for the iPhone 8 could be either bad news or good for Apple. The pessimistic interpretation would be that customers are not seeing enough differentiation between the iPhone 7 and 8, and are holding off until next year. The optimistic take would be that more customers than expected are willing to pay the price premium for the iPhone X.
Pessimists may be influenced by a carrier store survey claiming that the iPhone 7 is outselling the iPhone 8. Previous reports of iPhone 8 sales have sent mixed messages, KGI suggesting that the iPhone 8 Plus in particular has been seeing ‘better than expected‘ sales, backed by Foxconn revenues, while AT&T says that iPhone 8 sales are 900k down on those of the iPhone 7 last year.
Gartner would be in the optimistic camp, predicting earlier this week that iPhone X sales would help the smartphone sector as a whole return to growth next year.
Tim Cook has on more than one occasion warned that supply chain reports are a poor proxy for orders, due to the company’s complex network of suppliers, many components having multiple sources.