No, Apple iPhone X Isn’t in Trouble

September 25, 2017, 8:00 PM UTC

Stop worrying about Apple’s iPhone X.

On Monday, investors became concerned about tepid demand for the upcoming smartphone following a seemingly negative report by Digitimes, a news site focused on the Asian tech industry. It said that Apple had told its iPhone X suppliers that it only wanted about 40% of the components it had originally ordered, signaling weak initial demand for the device.

Amid the pessimism, Apple’s shares fell more than 1% in mid-day trading on Monday to $150.18. That came on top of earlier reports of lower iPhone 8 demand, increasing general pessimism about the latest versions of Apple’s flagship product.

The truth is, Apple’s (AAPL) iPhone X is just fine. And if you dig a bit deeper, and look at how things have played out over the years, there’s little reason to worry.

Let’s start with Digitimes itself.

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Over the years, Digitimes has been responsible for reporting on some Apple leaks that turned out to be accurate. But it has also published a number of inaccurate reports about Apple, a notoriously secretive company.

Deep in the latest Digitimes report, you find this bit of information about Apple’s component strategy for the iPhone X. It pours water on the notion that Apple’s request for fewer components is a problem.

“Apple adopted the same strategy previously for iPhone 7 in 2016,” the Digitimes report said. At that time, Apple reduced orders to 60% of its initial supply so it could analyze sales.

In the end, the iPhone 7 turned out to be a big seller, and Apple ordered the remaining supplies a couple of months later.

In other words, Apple’s iPhone X component strategy, as reported by Digitimes, wouldn’t be unique. It could merely be a strategy that it has followed in the past, and that Apple just wants to avoid forking out too much money for parts.

Also on Monday, KGI Securities Ming-Chi Kuo, who has a strong track record of predicting Apple strategy and sales, said that he believes iPhone X pre-orders could top 50 million units when they’re made available on Oct. 27, according to Apple-tracking site AppleInsider. Demand for iPhone X will be so strong, Kuo said, that the supply chain may have trouble keeping up until sometime in the first half of 2018.

Kuo’s comments were just the latest in a string of reports that have suggested iPhone X demand is strong. Customers, the reports say, aren’t turned off by the iPhone X’s $999 starting price tag and that Apple is on the cusp of a “super-cycle” that could see the company generate historic profits.

Proof of the iPhone X’s likely success, the theory goes, is the tepid demand for the iPhone 8. That device, which was released on Friday, had the worst first-weekend sales performance of any iPhone in years, according to data from researcher Localytics. It followed similarly weak sales through pre-orders. The reason, according to just about every research report and analyst? iPhone X.

And finally, if you’re a profit-seeking investor, there’s no reason to worry about the iPhone X.

According to data released earlier this month by researcher Susquehanna International Group, Apple will nab a $418 profit excluding costs like shipping and marketing on the sale each of new iPhone X.

So, let’s all just relax about the iPhone X and its supposed problems. This iPhone rollout is likely going just as well as Apple could hope—despite some investor jitters.

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