It’s far from the first warning about iPhone shipments from the industry’s top analysts. This time it’s TF International Securities analyst Ming-Chi Kuo cutting estimates for the iPhone XR. In October, it was Goldman Sachs and estimates for the company’s sales in China. Before that, it was Nikkei, Citi Research or Barclays Capital, lowering their respective estimates for the iPhone X, the iPhone 8 or the iPhone 5 over the years.
The regular concerns around iPhone demand have become close to routine for Apple as global smartphone sales slow and upgrade cycles grow longer. Apple beats consensus estimates for shipments anyway most quarters.
In 2013, after Barclays lowered iPhone sales estimates, citing “our checks in the supply chain,” Apple reported 2.4 million more units shipped than the research firm predicted. In 2017, Citi called iPhone demand “modest” and “tempered,” and Apple beat Wall Street projections for iPhone shipments by about 1 million.
Ahead of Apple’s fiscal second-quarter report in May, the company’s market value dropped by more than $60 billion in just three trading sessions, and at least five analyst firms adjusted estimates. Reported shipments fell just shy of consensus estimates, but analysts admitted they were overly panicked.
As early as 2013, Apple CEO Tim Cook was warning against taking supply chain rumors to heart. He addressed rumors of reduced orders on the company’s earnings call for its fiscal first quarter of 2013, saying:
I would suggest it’s good to question the accuracy of any kind of rumor about build plans and also stress that even if a particular data point were factual, it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex. And we obviously have multiple sources for things, yields might vary, supplier performance can vary, the beginning inventory positions can vary. I mean, there’s just an inordinate long list of things that would make any single data point not a great proxy for what’s going on.
In short, Cook said Apple’s network of suppliers is deep and complicated. One supplier cutting its outlook doesn’t necessarily mean iPhone demand is down.
Of course, it’ll be harder to see how Apple stacks up against reports of declining sales when it reports earnings for the December quarter. The company said earlier this month it would stop breaking out individual sales figures for the iPhone, iPad and Mac. However, revenue and profit growth could still be a good indicator as to how well the overall iPhone business is doing as Apple tries new strategies to charge more for each device and layer paid digital services on top of each gadget it sells.
If history is any guide, analysts and investors tend to get unnecessarily spooked over one-off iPhone supplier rumors, just to be proven wrong after Apple discloses sales.