Analysts In Disagreement Over iPhone X Demand

Disagreements have arisen among analysts over how many units of the iPhone X have been sold in the first month since the device was launched. According to KeyBanc Capital Market analysts, online searches for the device have been mediocre and it was unlikely for there to be an upside.

The KeyBanc Capital Market analysts added that online searches for the device globally were comparable to those of the iPhone 6S but below the volumes that were recorded for the iPhone 7 and the iPhone 6. Per the analysts part of the problem is the maturing of the smartphone landscape which has seen the addition of new features not able to lead to upgrades as was previously the case. Other analysts who hold a similar view includes Steven Milunovich, an analyst at UBS, who has said the demand is ‘flattish’.

Consumer interest

There are some analysts who hold a different view and this includes the team at Raymond James who wrote in a note late last month that the qualitative data showed that demand was good around the Thanksgiving Holiday.

Piper Jaffray analysts also expressed the same view saying that a survey which was conducted on over 400 owners of the iPhone had shown lots of consumer interest. Close to 50% of the survey’s respondents indicated that they were planning to acquire a new device in the next one year. A year ago only 30% had such intentions. Though a ‘supercycle’ hasn’t been ushered by the iPhone X as investors had been expecting, Piper Jaffray analysts have attributed the disappointing development to supply constraints rather than weak demand.

Supply constraints

But more than a month since the iPhone X hit the stores, most analysts are in agreement that supply has improved. Michael Walkley, an analyst at Canaccord Genuity, noted that lead times have fallen. The analyst added that Apple would gain market share in the period leading to the close of the year as a result of the strong demand for the new Apple gadgets.

Not all analysts are however optimistic that Apple’s supply problems have been completely resolved.

“With Apple unable to normalize supply during a key holiday selling period, we see limited opportunities for upside to forward estimates,” wrote, John Vihn, an analyst at KeyBanc.

This comes in the wake of reports indicating that Apple is nearing a deal to acquire Shazam, a music recognition app which was founded in the United Kingdom close to two decades ago, at a price of approximately $400 million.

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