“Before Apple Inc. unveiled the iPhone X in September, some investors expected the company’s new flagship product to drive a multi-year growth cycle, much as the iPhone 6 did three years previously,” Alex Webb reports for Bloomberg. “On Monday, Austrian chipmaker AMS AG became the latest to warn that its business was being affected by ‘a more difficult short-term demand environment in the smartphone market.’ In other words, people aren’t buying as many iPhone Xs as hoped. Baader Bank analyst Guenther Hollfelder estimates that the AMS numbers indicate between 20 million and 25 million fewer iPhone X sales than expected.”
“Ultimately, the lack of stellar unit sales might not matter to the Cupertino giant,” Webb reports. “Apple has managed to offset those disappointing numbers with higher prices, and is accelerating its push into services – a business that includes the App Store, iCloud and Apple Music and is generally more profitable than the iPhone.”
MacDailyNews Take: And sales of other iPhone models from the SE to the 8 Plus.
“None of that helps suppliers, who don’t get a piece of Apple’s improved margin. The slower unit sales are a problem for AMS, which provides key components for the 3-D sensing system used in the iPhone X’s Face ID,” Webb reports. ” AMS has warned that much of its expanded production capacity will sit idle. The company will endure negative adjusted Ebitda in the second quarter as a consequence… All is not lost… It expects capacity to be gobbled up as Apple introduces Face ID for cheaper models and others pile into the technology.”
Read more in the full article here.
MacDailyNews Take: As next-gen iPhones and iPad Pros get TrueDepth Camera systems, makers of components for Apple’s 3D sensing technology will be just fine.
Bernstein: AMS AG is biggest winner in Apple’s TrueDepth Camera system – April 10, 2018