Apple reportedly reduced orders from component suppliers for its new iPhone 7 models, with weaker than expected demand in many markets.
Demand for iPhone 7 devices in China and other markets has decreased significantly since the launch in September, sources from Taiwan’s handset supply chain told DigiTimes. The new device did receive an initial boost from Samung’s Galaxy Note 7 battery debacle, but that lift was short term and has since faded.
Component suppliers expect iPhone 7 shipments in the first half of 2017 to be at least five million units lower than in the second half of 2016, DigiTimes reported.
A Pacific Crest Securities analyst trimmed his sales outlook for the current quarter to 76.8 million iPhone units from 78.3 million and for the next quarter to 55.4 million from 58.9 million. For fiscal 2017, he cut his forecast by about seven million to 225 million units, Seeking Alpha reported.
Pacific Crest analyst Andy Hargreaves sees a number of near-term risks impacting the iPhone’s gross margins, including currency fluctuations (due to the strong US dollar), uncertainty over trade policy with Donald Trump’s election, as well as rising component costs.
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