fbpx
Technology

Apple’s iPhone X Will Be Killed Off This Year

Apple`s iPhone X is likely to be discontinued this year if earnings from one of the company’s top suppliers are anything to go by, according to an analyst.

Taiwan Semiconductor Manufacturing, or TSMC, the world’s largest semiconductor foundry company, revised its full-year revenue target to the low end of its forecast. Shares in the company closed 6.3 percent lower on Friday.

One of the biggest concerns for Neil Campling, the co-head of the global thematic group focusing on technology at Mirabaud Securities, is the oversupply of chips. This “has never been higher,” according to Campling’s note to clients Thursday. His firm has tracked inventory data at TSMC for over a decade.

The chipmaker’s current situation could give investors concerns over AMS, Apple’s key supplier of 3-D sensing technology in the iPhone X. The 3-D sensors are key for the Face ID feature that lets you unlock the device by looking at it.

TSMC’s record inventory levels are due to Apple not buying components for any future iPhone X models, suggesting the device will be killed off this year, Campling said.

“With the declines in iPhone X orders and the inventory issue at TSMC at record highs, which basically reflect a need to burn off inventory. Why? Because the iPhone X is dead,” Campling wrote in his note.

“The simple problem with X is that it is too expensive,” Campling told CNBC by phone on Friday, talking about the device’s $999 price tag. “Consumers are turning their backs on high-priced smartphones.”

He clarified that any old inventory of iPhone X models will still be on sale, but no new ones will be produced.

Apple had yet to respond to a request for comment when contacted by CNBC.

The iPhone X has had a rocky road to market. It was delayed after being announced last year, and a recent report from the Nikkei suggested Apple had cut its production targets for the phone.

Following TSMC’s results, a number of analysts warned that iPhone sales in the first quarter could come in below expectations.

In January, noted Apple analyst Ming-Chi Kuo of KGI Securities, said the iPhone X could be canceled in the summer.

New iPhones?

Campling expects Apple to bring out a number of new iPhones. One could be a cheaper model priced at around $500. One could be a model that has space for two SIM cards, which is a popular choice for businesses and the Asian market.

Another new iPhone could keep the form factors of the iPhone X but with a cheaper price tag.

Meanwhile, Kuo said at the end of last year that he thinks Apple will launch three new iPhones in 2018, with features mirroring what Campling expects.

AMS Revenue Fall

Campling said any cancelation of the iPhone X will have a big impact on AMS. The chipmaker could see as much as a 35 percent quarter-on-quarter decline in revenue in the second quarter, worse than the expected 18 percent reduction.

“If the iPhone X is being killed off then you may go from a production of 12 million in Q1 to potentially zero in Q2, then that is a $60 million hit alone (to revenues),” Campling said in a note.

One of the biggest issues for AMS is the cost of 3-D sensing components, which is between $50 and $60, according to the analyst. The price could put off other major manufacturers such as Samsung and Huawei from buying the technology.

Campling took his “buy” rating of the stock and removed it from his top list of 11 stocks. AMS reports first-quarter earnings on April 23.

This story originally appeared in CNBC.

Join The Discussion

Trump's Plan To End Shutdown Falls Flat
Trump’s Plan To End Shutdown Falls Flat [Video]
World's 26 Richest People Own As Much As Poorest 50%
World’s 26 Richest People Own As Much As Poorest 50%
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed [Video]
Brexit Plans In Chaos After UK Parliament Rejects Proposal
Brexit Plans In Chaos After UK Parliament Rejects Proposal [Video]
How To Buy Bitcoin Anonymously
How To Buy Bitcoin Anonymously
Number Of Bitcoin ATMs Hits 4,000 Globally
Bitcoin ATMs Hits 4,000 Globally-Why Is It Growing So Fast?
Is Bitcoin Building Support Above $3,500
Is Bitcoin Building Support Above $3,500?
Belarus Allows Traders To Buy Shares With Bitcoin
Belarus Allows Traders To Buy Shares With Bitcoin
The Future Of Online Shopping
The Future Of Online Shopping
10 Marketing Trends To Watch In 2019
10 Marketing Trends To Watch In 2019
40+ Video Marketing Statistics For 2019
40+ Video Marketing Statistics For 2019 [Infographic]
Emerging Email Marketing Trends To Survive 2019 And Beyond
Emerging Email Marketing Trends To Survive 2019 And Beyond [Infographic]
The Latest Social Media Automation Rules In 2019
The Latest Social Media Automation Rules In 2019
4 Tips To Help You With The Constant Changes In Social Media
4 Tips To Help You With The Constant Changes In Social Media
Instagram's Testing Side-Scrolling Feed View, Similar To Stories
Instagram’s Testing Side-Scrolling Feed View, Similar To Stories
The 10 Best Instagram Tools For 2019
The 10 Best Instagram Tools For 2019
What Is Your Therapist Listening For
What Is Your Therapist Listening For?
Wish You Were Smarter
Wish You Were Smarter? These 4 Brain Hacks Can Help You Get There
Weightlifting Less Than An Hour Per Week Could Increase Your Longevity
Weightlifting Less Than An Hour Per Week Could Increase Your Longevity
Your Environment May Affect Your Eyes More Than You Realize
Your Environment May Affect Your Eyes More Than You Realize
Trump's Plan To End Shutdown Falls Flat
Trump’s Plan To End Shutdown Falls Flat [Video]
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed
Thailand Signals Shift In Refugee Policy After Rahaf Mohammed [Video]
Brexit Plans In Chaos After UK Parliament Rejects Proposal
Brexit Plans In Chaos After UK Parliament Rejects Proposal [Video]
Coming To Canada 'Worth The Risk,' Says Saudi Teen Refugee
Coming To Canada ‘Worth The Risk,’ Says Saudi Teen Refugee [Video]