Deutsche Bank analyst says investors are too optimistic about the Apple iPhone X

Deutsche Bank analyst says investors are too optimistic about the Apple iPhone X
During an interview with business cable channel CNBC on Monday, Deutsche Bank analyst Sherri Scribner said that based on Apple's current stock price, investors are too optimistic about Apple's prospects. As she put it, "Expectations are pricing in more than Apple can chew." The analyst says that investors are expecting Apple to pull off a repeat of fiscal year 2015, which was led by the release of the iPhone 6 and iPhone 6 Plus. With a larger 4.7-inch screen on the former, and Apple's first phablet represented by the latter, the company garnered revenue $31 billion above expectations.

The problem, according to Scribner, is that for Apple to score revenue $30 billion above expectations for fiscal year 2018, the company would have to ship 290 million iPhone units during the new fiscal year that started at the beginning of this month. The problem is, the best year Apple ever had was fiscal 2015 when the iPhone 6 upgrade cycle led Apple to ship a record 231 million handsets. Current Wall Street expectations call for Apple to ship 245 million iPhone units in fiscal 2018. It would be a new record, but could fall short of the number needed to meet investors' expectations.

While the Apple iPhone 8 and Apple iPhone 8 Plus might not be enough of an upgrade to produce record shipments, the Apple iPhone X could help Apple toward reaching that goal. It's the first iPhone to feature an OLED display and it offers an edge-to-edge 5.8-inch screen. Throw in new AR features, the Portrait Lighting mode that creates dramatic backgrounds for selfies, and the new TrueDepth Camera with Face ID, and Apple is offering some exciting new features. But there is a price to pay to pay for all of these new capabilities. The complex TrueDepth Camera is proving to be hard to manufacture. As a result, Apple might have a very limited number of units available when the phone launches on November 3rd. Apple could decide to push back the launch date to December.

For fiscal 2019, Scribner sees a comparison to fiscal 2016 when the iPhone 6s series sparked a down year for Apple. She expects Apple to report a drop in sales for fiscal 2019.


source: CNBC

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5 Comments

1. Settings

Posts: 2942; Member since: Jul 02, 2014

The bank says true. iPbones are affordable to manufacture but expensive to sell. Big profit margin.

3. GreenMan

Posts: 2694; Member since: Nov 09, 2015

Apple X isn't out yet and it's already proving to be a nightmare for Apple. The cutout display of The X has a low yield rate, and so does the camera lens at the back and that means LOSS of both time and resources which equates to less profits. The iPhone X is already over a month behind the iPhone 8 Duo and Apple just can't afford to delay it till December, time is precious. The reason time is precious is because iPhone 8s aren't exactly flying-off the shelves because of 'obvious' reasons, and neither did iPhone 7s, and that delay with iPhone X might result in a HUGE impact in Apple's yearly performance. Apple should've thought of the low production yield before the commencement of mass production. The X should be at the customer's doorway by the beginning of November and must ship over 75% of iPhone Xs (estimated, of course) before January 01, 2018! But then again... It's APPLE, after all! It's a bloody deity to some people! Don't worry; Apple will surely survive this, no question about it. Although it 'might' witness a dip in it's share prices. Oh well, G'Day!

4. Settings

Posts: 2942; Member since: Jul 02, 2014

Whether it's trash or not, iPhone X will still sell well. Take note that the X is not the "mainstream" iPhone, like the SEs or 5cs. More like a profit buffer. The way they do the 8 series that look like A LOT like the 7 series, they probably came to the conclusion that theh need to come up with more gimmicks. Thus the iPhone X.

5. uncle_gadget

Posts: 1050; Member since: Sep 20, 2017

"Whether it's trash or not, iPhone X will still sell well." And that's all that matter to you. Unless you're a stockholder, why do sales even matter? For me, anyone who can sell 1M of something, has a decent product. And there are things that don't sell in the millions that are certainly more than decent. The iPhone has been popular since day one. If sales are all that matters to you though, then that's just plain sad.

2. L0n3n1nja

Posts: 1511; Member since: Jul 12, 2016

If the iPhone X continues to have production problems it will be months before they can meet demand. I still remember the iPhone 6 launch, had a guy break his 6 Plus in the first week, took over a month for insurance to replace it because there was no stock and the phones were on back order. Apple can't meet that level of demand for the iPhone X unless they fix the manufacturing issues and actually make the phone available. IPhone 8 isn't enough of an upgrade for most.

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