Citi Research is lowering its iPhone production forecast for the first quarter of 2019. It's also cutting its estimates for the iPhone XS Max by almost half.
With this development, the firm joins other analysts that also have the same sentiment toward the iPhone as demand for Apple's device begins weakening.
iPhone Sales Outlook Turns Sour
Reuters reports that Citi is reducing its forecast from 50 million iPhone to 45 million. According to William Yang, an analyst from the firm, the cut is mainly because of the weak demand for the iPhone XS Max.
"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," Yang writes in a research note to clients.
Speaking of the iPhone XS Max, which has a starting price of $1,099, Citi is slashing down its forecast for the handset by 48 percent.
Before Citi, Ming-Chi Kuo predicted that iPhone sales will be down by 20 percent for the first quarter of 2019. He said that the figures will be down to between 38 and 42 million from 50 million in the same quarter of 2018.
Rosenblatt also cut down iPhone forecast, but it said that the iPhone XR will suffer the most with a reduction of approximately 2.5 million units.
On a related note, the Consumer Intelligence Research Partners (CIRP) found that the iPhone XR is driving more Android users to switch out of all the iPhone devices. The report said that 16 percent upgraded to an iPhone from an Android device during November, one month after the iPhone XR hit the shelves in October.
iPhone Production Cuts
Back in November, the Wall Street Journal reported that the Cupertino brand had to cut iPhone orders for all three models that launched in September. It's believed that it's because of how difficult it is to predict demand for a lineup that consists of three different versions.
Reportedly, weak iPhone XS and iPhone XS Max sales also prompted Apple to resume production of the iPhone X, which was put to a halt when the new models were unveiled.