Apple iPhone Demand Soft, But That’s OK, Analyst Contends

Demand for Apple (AAPL[1]) iPhones is soft as consumers await the fall launch of the company’s 11th-generation handset, the rumored iPhone 8, but that’s nothing to be worried about, according to one analyst. “Our work indicates iPhone demand remains soft, as expected ahead of the iPhone 8 launch,” Nomura Instinet analyst Jeffrey Kvaal said in a note to clients Wednesday. “We expect the iPhone 8 to bring sufficient upside to defer concerns of the next phone cycle for now.” He believes the current softness in iPhone sales bodes well for Apple’s fiscal first quarter, which starts Oct.

1. But iPhone sales in the next two quarterly reports are likely to be lackluster. Analysts are expecting iPhone-unit sales of 41 million and 47 million in Apple’s fiscal 2017 third and fourth quarters, respectively, he said.

“Our checks indicate U.S. (iPhone) subscribers are deferring (upgrades) until the higher-ASP (average selling price) iPhone 8 launches,” Kvaal said. “We believe U.S. carriers are preparing assertive promotions for the launch.”

IBD’S TAKE: For the latest on Apple stock, visit IBD’s news page[2]

Sprint (S) and T-Mobile Cellnet Review US (TMUS[3]) are likely to be aggressive with their iPhone 8 promotions to attract new subscribers, while market leaders AT&T (T) and Verizon (VZ) will be competitive to defend their bases, Kvaal said. Kvaal is modeling iPhone sales of 87 million units for fiscal Q1, vs. a consensus of 83 million. For fiscal 2018, Kvaal expects Apple to sell 260 million iPhones, vs. a consensus of 242 million.

Kvaal expects the iPhone average selling price in fiscal Q1 to be £737, vs. a consensus of £719, thanks to the premium-priced iPhone 8. The iPhone 8 is rumored to feature a major redesign with a 5.8-inch OLED display, wireless charging and augmented-reality capabilities. RELATED:

As iPhone Turns 10, Apple Is Preparing To Replace It[4]


  1. ^ AAPL (
  2. ^ IBD’s news page (
  3. ^ TMUS (
  4. ^ As iPhone Turns 10, Apple Is Preparing To Replace It (

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