Austria’s AMS AG, maker of Apple TrueDepth components, warns of short-term demand difficulties

“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


    1. Pipeline Cook.

      I have had an iPhone X since launch. I would never go back to older iPhones for one reason: the elimination of the home button is much better and faster with using gestures.

      However, I can’t say I really love this phone because I don’t. The camera placement and bump suck. The OLED screen is in many ways a little worse than LCD Retina. The rounded corners and notch are hideous with some terrible and embarassing impediments to content on screen. And, the price of this is absurd.

      1. seems clear to me that iphone x was a prototype released for 10 year anniversary, but better and improved components were nearly ready for production and now replacing prototype components, the idiotic wall street charlatons deliberately misinterprete to rationalize their short sells, etc

      2. My Xr is the best iPh I’ve owed. It’s also the largest phone I’ve owned, which logically could equate to the heaviest iPh I’ve owned. Physically, the weight is the least desirable aspect, but hardly onerous.
        The home button is an archaic vestige that I don’t want to experience again. Navigation w/o it is spry. Though I mostly appreciate the iPh turning on with an upward orientation movement, sometimes I’d like to have a choice in “on, or off.”
        True of all iPhones, “why” and “farking why” does Apple continue with the shut down button on the side opposite of the volume controls? There’s got to be only one reason = $$. Operationally/ergonomically; it’s a befuddling kluge.
        Price? Yes, it’s expensive and concerning that Apple uses the price increase to (principally) cover overall financial losses.

  1. With Apple focusing more on profiting from services, Wall St. may keep an eye on them to see how Apple will ‘buck’ the trend of other companies that sell the HW affordably to sell more services. Sell the razor cheap and make money on the blades, Sell the console cheap and make money on the games., etc.

    1. Only Apple doesn’t sell anything that can take advantage of their services for “cheap”. Even the least expensive are still more than the competition’s.

      I think this is one reason why Apple Music is growing at a faster rate than Spotify. Apple sells many devices to people who have the money that could actually purchase the service, AND that would prefer an Apple offering.

  2. I am seeing more and more people with the iPhone X. I love mine, it is a near perfect phone. The downside for Apple is that I have typically updated ever year, and the next iPhone would have to have something very special to get me to upgrade from near perfection. My guess is many iPhone X owners feel the same way. (The good news for Apple is if the iPad Pro adopts Face ID, I’m instantly upgrading my 10.5 inch iPad.)

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