Apple (AAPL) is likely to meet expectations for iPhone unit shipments in the March quarter, but lower-priced handsets will make up a higher percentage of the mix than anticipated, a Wall Street analyst said Monday.
It appears the tech giant built and shipped 45 million iPhones during the period, in line with expectations, Susquehanna Financial Group analyst Mehdi Hosseini said in a note to clients. But low-end iPhones are making up a larger portion of shipments as consumers shun premium handsets for cheaper models, he said.
Checks with companies in Apple’s manufacturing supply chain suggest the iPhone X accounted for only 8 million units in the first quarter. That was about half the 15 million expected, he said. The iPhone X retails starting at $999 and is the company’s most expensive iPhone to date.
Apple’s iPhone 8 series smartphones accounted for about 15 million units, less than the expected 16 million, Hosseini said. The iPhone X, iPhone 8 and iPhone 8 Plus were introduced in September as 11th-generation smartphones.
Less expensive older models, including the iPhone SE, iPhone 6S series and iPhone 7 series accounted for the remaining 22 million units, he said.
Samsung Cuts Galaxy S9 Orders
Apple’s main rival, Samsung, also is seeing consumers push back on higher-priced smartphones, Hosseini said.
Supply chain checks suggest Samsung recently cut planned production of its flagship Galaxy S9 smartphone this year to 36 million units from 40 million, he said.
For the June quarter, Apple plans to build 40 million iPhones, including 8 million iPhone X units and 15 million iPhone 8 series handsets, Hosseini said.
The company likely will phase out its entry-level iPhone SE and market its two-year-old iPhone 6S as a low-cost model in emerging markets. It is likely to sell the one-year-old iPhone 7 as a low-cost model in developed markets, he said.
Apple shares lost 0.7% to close at 166.68 on the stock market today.