More bad news for Tim Cook as Apple’s unprecedented iPhone XR discounts spread out from the Apple website alongside more information that sales are not meeting Apple’s reduced expectations.
The latest information comes from screen supplier Japan Display. Having already cut its forecast growth last month, it has cut its production of displays and its forecast growth once more. GizmoChina reports:
For the Japan Display, around 80 percent of its overall revenue is generated through the production of the display panel for smartphones. [The] majority of those earning is dependent on its business with Apple.
Earlier, the company, known as JDI, has reported sales forecast growth in the range of 10 percent to 20 percent. However, last month, the company lowered the numbers to between 5 percent to 15 percent for the year ending in March 2019. It is also cutting its operating profit margin estimate.
Of course, production levels change throughout the life of a smartphone, but this is something that manufacturers are aware of. All of them, including Apple, have significant historical data that will show the patterns of purchase from the faithful, the followers, and the general public.
Apple will have looked at that data, planned accordingly, and ordered in the parts required. That planning would have included a slowing down of the production lines after the initial rush in September and October, and then the lower numbers after the festive period.
Every sign from suppliers points to orders that were expected from ‘a large nameless client’ (which if we assume Taniyama-Shimura implies Apple’s iPhone division) being cut after the launch and initial sales of the new iPhone handsets. It’s natural to assume that Japan Display is one such company.
Not only do we have more indicators from suppliers, but we have indicators from Apple. While there is no official comment on sales numbers (and as we know, Tim Cook and his team will no longer be reporting iPhone sales numbers in quarterly earnings), the online offer of a $300 discount (via trade-in) for the iPhone XR is now available in Apple Stores.
Just over a month after release and there is at first glance a forty percent cut in the iPhone XR price. Apple may be keeping everyone in the dark about the actual sales numbers, but all the evidence is pointing in one direction… and it’s one that is trending downwards compared to previous years.
The question now is about balance. Will the increased margins on the iPhone and the associated online services make up for the loss in unit sales? And how long can Apple go on losing market share while maintaining the expected level of profit?
Now read more about Apple’s massive discount on the iPhone XR…