14 DAY TRIAL // Recent speculation coming from the supply chain indicated that Apple might be cutting iPhone X production due to demand that is weaker than expected, with some citing the high selling price of the device as the main reason.
But according to Rosenblatt analyst Jun Zhang this is not at all the case, as the production cuts that might be happening at a number of suppliers are likely to be aimed at the iPhone 8, and not at the iPhone X.
In a note to investors, the analyst explains that iPhone X demand is still strong and is unlikely to change in early 2018, especially following Apple finally managing to align production with orders across the world.
“Our research indicates no further order cuts after the holiday season. Taiwanese media reports and estimate cuts could be confusing the market as we believe they are referring to previously mentioned iPhone 8/8 Plus production cuts with an iPhone X production ramp in December,” the analyst says.
“Some media reports are likely highlighting cuts at specific iPhone 8 component suppliers and Android orders, we highlight that we do not see 3D sensing or OLED panel order cuts, which are specific components for the iPhone X,” he continues, emphasizing that parts that are exclusive to the anniversary iPhone X are still manufactured at the same pace as before.
Production struggles
Initial sales of the iPhone X have been impacted by the constrained supply, with original inventory selling out in just a few minutes after the beginning of pre-orders in the largest markets.
Manufacturing, however, has been dramatically impacted by the complex nature of certain components, like the Face ID facial recognition system and the OLED display, with very low yield rates achieved in the early stages of mass production.
People close to the matter said Apple has even lowered specifications for Face ID, eventually compromising its accuracy, but the company strongly denied such reports.