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Reports suggest that only 20 million iPhone Xs will be available for purchase by the end of the year, half of what Apple was initially targeting for.
It’s been just over a month since Apple (NASDAQ:AAPL) launched the iPhone 8 and iPhone 8 Plus, but already a new sheriff is rolling into town next week: the iPhone X.
Since last month’s launch (September 22), Apple’s share price has increased marginally by 2.42 percent, which includes its 0.6 percent increase on Tuesday (October 24) to close the day at $157.10, although after hours trading brought it down slightly by 0.15 percent. The iPhone X is slated to launch on November 3, with preorders beginning on Friday (October 27).
Tuesday’s share price increase comes as a slight surprise, particularly as Japanese news outlet Nikkei suggested that only 20 million iPhone Xs will be ready to sell by the end of the year, which is roughly half of what Apple had initially planned for.
“The iPhone X is currently being produced at a rate of 10 million units per month, but with the sales scheduled to begin on Nov. 3, Apple is likely to only provide 20 million units this year,” the news outlet reported.
Alex Webb from Bloomberg said on Bloomberg Markets on Tuesday that some of the technology used in the new phone–such as the OLED organic lighting, which to date has only been successfully used in Samsung’s (KRX:005930) Android phone, and face ID–have had issues resulting in the company missing its expected quantity release.
Despite the reports, Apple’s shares clearly haven’t been negatively impacted. Webb continued, stating that Apple investors aren’t buying the company’s stocks for how many iPhones it sells once the iPhone X becomes available next week.
“[Investors] are buying into what they call the super cycle,” Webb said. “The lifespan of the iPhone X, which could extend two years and the optimism that people will buy this particular version of the iPhone X, and subsequent iteration. It’s not an investment of one quarter, it’s an investment of a year or two.”
In short, despite Apple’s slight set back in terms of how many iPhone X units will be available, it has no significant bearing into how its stock will–and is expected to–perform.
On that note, just last week (October 19), Brian White, an Apple analyst at Drexel Hamilton said investors should buy Apple stocks before preorders begin for the iPhone X. White previously set a target price of $208 for Apple’s share price, which is roughly a 32 percent increase. Year-to-date, Apple’s stock has risen 35.64 percent.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
