Component demand for iPhone X weakening, say sources
Despite having enjoyed a surge in orders for the iPhone X in September and October, sources from the upstream component supply chain saw their shipments for iPhone devices weaken in November and are likely to drop further in December.
With demand for key component not growing as strong as expected, the sources are concerned that Apple may reduce its iPhone X shipment target for the first quarter of 2018. The sources pointed out that Apple's component orders for the iPhone X in November were around 30% lower than its earlier forecast.
The weakening in component demand comes as the yield rates for the production of the iPhone X have improved, shortening the waiting period for pre-orders from 5-6 weeks to 1-2 weeks, indicated the sources.
Apple's key component supplier Largan Precision saw its November revenues grow a mere 0.05% from a month ago and expects its December revenues to decline on month as its clients may weaken their efforts on pulling in orders.
Other Apple suppliers also experienced a similar scenario. Chassis maker Catcher Technology saw its November revenues drop 10.4% on month, while touch panel supplier General Interface Solution (GIS) also suffered a 15.53% sequential decline in November revenues. GIS had originally expected its sales momentum to continue into 2018.
Meanwhile, GIS and TPK Holding both expect their December revenues to slide from a month ago.
For the first quarter of 2018, the sources expect iPhone X shipments in January and February to be at the comparable level as that seen in November 2017 and will decline sharply in March. Overall iPhone X shipments are expected to be down by around 30% sequentially in the first quarter of 2018 because of seasonality and fewer working days caused by the Lunar New Year holidays.
However, the sources believe Apple's iPhone shipments in the first quarter of 2018 may still be better than those recorded in the same period of 2017.
With the recent market rumors indicating that Apple may release a new 6-inch iPhone with a design similar to that of the iPhone X and also featuring the face recognition function in 2018, market observers believe that some consumers may decide to delay their purchasing plans to wait for the new device.