Apple iPhone XR shipment forecast slashed by analyst Ming-Chi Kuo

Roman Schwartz
November 13, 2018

According to Lumentum's press release issued this morning they stated: "We recently received a request from one of our largest Industrial and Consumer customers for laser diodes for 3D sensing to materially reduce shipments to them during our fiscal second quarter for previously placed orders that were originally scheduled for delivery during the quarter", said Alan Lowe, President and CEO.

With the iPhone XR being as it is, the Huawei Mate 20 series is providing an alluring alternative, which is hurting Apples potential sales.

"We think investors should consider Lumentum's updated guide as reflecting as much as a 30 per cent cut in Apple orders", Wells Fargo analyst Aaron Rakers said in a note to clients. Analyst Mark Kelleher believes that Apple might have had too much Lumentum inventory which it needs to clear off.

Japan's Nikkei reported earlier this month that Apple had told its smartphone assemblers Foxconn and Pegatron to halt plans for additional production lines dedicated to the iPhone XR, the cheapest of this year's new launches.

Estimates of Apple's "most affordable" 2018 model, the iPhone XR, has been cut by almost 30 million shipments, a famed Apple analyst has written in his research note. He predicts shipments in the 47-52 million range, compared to 52 million sold in the first quarter of 2018.

"IPhone XR parts suppliers such as Career and Nissha printing would be "the major losers resulting from the XR cut because these two firms can not benefit from the increased shipment estimations of legacy models", added the report.

Early in the year, the company confirmed it had been intentionally throttling the speeds of some older phones to avoid battery-related problems.

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Apple tried to talk up the amount of cash it was making from services although bankers are not that happy with what Jobs' Mob has done about Apple Pay and are making their displeasure known.

Loop Capital Markets also said the customer is likely Apple.

Asian suppliers also tumbled after the report.

The move led analysts to question the company's business and its share price has since dropped 12.6%.

What we think happened is that in the last few years Apple coasted on Tim Cook's financial footwork and forgot that it needed new products to capture the public's attention.

Apple stock is down over 10% since it said it would no longer disclose hardware unit sales on November 1 - and these reports suggest that it may be a while before the company has another unit growth spurt.

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