With Apple due to release its Q1 2018 financial results Thursday, analysts and investors will be watching for numbers indicating whether the iPhone X is a hit or a disappointment. However, there have already been some rumblings suggesting that Apple's $1,000-plus smartphone of the future isn't selling as well as previous flagship devices.
iPhone X production in the first quarter this year could be halved, from 40 million to 20 million units, due to muted sales, according to reports this week by the Nikkei Asian Review and The Wall Street Journal. That prediction is based on reports that Apple is cutting its orders to suppliers that manufacture a number of key components for the phone.
Meanwhile, other reports are pointing to a shift in focus for Apple's next update to its mobile operating system. Rather than refreshing the home screen and rolling out other improvements, iOS 12 is more likely to target improving performance and reliability, according to an article published today in Axios.
Three iPhones To Launch this Year
Design and component challenges were blamed for the delayed launch of the iPhone X, which came out in November instead of Apple's usual September kickoff for new flagship phones. And multiple reports indicate that some of the iPhone X features haven't wowed buyers.
In fact, in a research note published last week, well-regarded Apple analyst Ming-Chi Kuo of KGI Securities suggested that Apple could retire the iPhone X this summer in favor of an iPhone X Plus. He also predicted Apple would likely launch two other iPhones this fall.
Kuo issued another research note yesterday saying Apple's device plans for this year could be aimed at avoiding some of the challenges it encountered last year with the iPhone X.
"With three new models in the pipeline for the second half of 2018, we believe Apple may have used up its development resources," Kuo said in an edited version of his comments published by MacRumors. "Also, we think the firm will do all it can to avoid repeating the mistake of a shipment delay for the three new models. As such, we believe Apple is unlikely to have enough spare resources to develop a new iPhone model for launch in 2Q18."
A separate note from a Deutsche Bank analyst, reported today in the investor site ZeroHedge, also offered a dim outlook for the iPhone X.
"Our argument has been that the phones were too expensive to drive massive adoption, consumers are keeping their phones longer because of their high cost, the market is now only a refresh market, and the iPhone X features weren't enough to drive non-early adopters to buy new phones," Deutsche analyst Sherri Scribner wrote.
iOS 12 To Focus on Performance
In the meantime, today's Axios report points to Apple putting more emphasis on improving existing features in its operating system rather than rolling out new ones when it comes out with its iOS 12 update, most likely in September.
The publication based that prediction on comments made by senior vice president of software engineering Craig Federighi during an employee meeting earlier this month.
"While a renewed focus on quality and performance might ease some outside criticism, some inside the team question whether the approach will actual lead to higher quality," Axios reported. "Plus, customers tend to pay for features more than security and reliability, which are tough to assess at the time of purchase."
Apple has been criticized recently for its handling of iPhone performance issues, following the revelation late last year that it was throttling the performance of older iPhones with aging batteries. Last week, the company released a developer preview of iOS 11.3 that provides users with more information about the battery health and power management behavior of their devices.
Set to roll out in the spring, the iOS update will also enable users to turn off the dynamic power management feature, which was introduced in 2016 to prevent older devices from unexpectedly shutting down.