Citi Research cuts estimate for Q1 production of iPhone XS Max by half

The 2018 iPhone run has had a difficult time since its launch in October. Analyst after analyst has cut their prediction for sales of the iPhone XR, Xs, and Xs Max. On Friday, Citi Research added fuel to the iPhone fire by cutting production estimates for all 2018 iPhones by 5%, including a steep 48% cut for the iPhone Xs Max.

In a statement made December 28th, analyst William Yang of Citi Research said:

The material cut in our forecasts is driven by our view that 2018 iPhone is entering a destocking phase, which does not bode well for the supply chain.

Citi Research subsequently lowered its estimate of 2018 iPhones (meaning the iPhone XR, iPhone Xs, and iPhone Xs Max) production from 50 million to 45 million units. Most of this cut concerned the iPhone Xs Max solely; Citi Research cut production estimates of Apple’s priciest flagship by half.

Citi Research isn’t the only brokerage analyst firm that has cut expectations. Last month, Apple analyst Ming-Chi Kuo cut his sales expectations for the iPhone XR by 30% for 2019Q1 and 2019Q2.

Apple itself cut orders from suppliers of iPhone components twice last month. Citing a growing malaise among smartphone consumers and an anemic Chinese market, Apple has had to temper its own expectations for sales of its latest devices.

Considering that the competition in the premium smartphone market has never been fiercer (and considering that cheaper smartphones are continually getting better), Apple already had its work cut out for it in October. Maybe releasing iterative upgrades with higher price tags wasn’t the strategy to pursue after all.

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