Apple Inc. shares declined by almost 3 percent on Thursday on indications of weak demand for the iPhone 8 that prompted investors and analysts to raise doubts regarding the effectivity of the firm's release strategy for its new phone model.
Wireless carriers in the U.S. and Canada has posted slow-third quarter customer upgrades to the latest model. Some anticipate an increase after the iPhone X becomes available in November. However, some cautioned that the new model's high price tag could affect demand.
The CEO of Rogers Communication, the biggest mobile network in Canada, said the demand for iPhone 8 and 8 Plus, which was unveiled to the market in September, had been described as “anemic”, the latest indication of weak sales for the sale phone models before the November 3 launch of the more expensive iPhone X.
However, some analysts said that total phone production were aligned with their earlier estimates, and that it is not yet definitive whether weak iPhone 8 sales would impact iPhone revenue and margins because users may still be acquiring more profitable older models with more memory.
Verizon Communication Inc's CFO Matt Ellis said the number of Q3 phone upgrades declined against the prior years, but said that an upgrade increase is anticipated when the iPhone X is released to the market.
The uncertainty regarding demand, along with a report by Taiwan media of a reduction in iPhone 8 production drove down Apple shares by 2.8 percent by midday trading.