Thursday, October 12, 2017

Can the iPhone survive the hype?


With the release of the iPhone X within a few weeks, many analysts and technology observers are confident that Apple's next-generation iPhone will launch one of the biggest iPhone update cycles we've seen.
And rightly so, the iPhone X represents the first major redesign to the iPhone's form factor in over three years. Consequently, the idea that the iPhone X will be a monumental success has almost come to be accepted as an irrefutable fact.
Recently, analyst Ming-Chi Kuo , who may have the best track record of any Apple analyst in history, believes the iPhone X will help Apple sell more than 250 million iPhone units by 2018 .
As a point of comparison, most of the iPhone that Apple has sold in a given year came in 2015 when it sold 231 million units. Clearly, and perhaps deservedly, the expectations surrounding the iPhone X are very high .
However, not everyone is eager to jump aboard the car of Apple's new device. In a recent note to investors, Deutsche Bank analyst Sherri Scribner argues that the hype surrounding the iPhone X has run out of control .
We remain fearful that investor expectations for the iPhone 8 and iPhone X cycle are more optimistic than realistic ," Scribner said in a note obtained by CNBC.
Considering the additional upside required to drive higher share gains, " added Scribner, " and our view that the FY-19 estimates need to come down to realistically reflect one year after a strong cycle, we see a modest risk on actions ".
Scribner has labeled a target price of $ 140 in Apple shares, which means he sees Apple's share of 10% decline in the near future.
It will be very interesting to see how to animate iPhone X sales . While there are certainly many iPhone owners eager to upgrade as soon as possible , there are a few things to keep in mind. For starters, it remains to be seen how long it takes Apple to increase supply to meet demand.
Second, it remains to be seen whether the appeal of a borderless iPhone can offset any potential quirks that come along with Face ID and the rather controversial design of the iPhone X.
It is also entirely possible that the concerns about Face ID and notch are completely exaggerated and that the demand for the iPhone X is astounding. Either way, the coming months will be incredibly interesting for Apple .
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