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Rosenblatt Securities' Jun Zhang, who was perhaps the leading skeptic of the iPhone X and stuck with that bearish outlook even as it was clear the 2017 phone was a hit, weighs in again on iPhone XS and XS Max, with the same take.
A new note from Zhang, releaesd Monday, called iPhone XS opening weekend sales "weak," while those of the larger iPhone XS Max were stronger. Zhang continues to view Apple's stock as overpiced, maintaining a $200 price target that's well below where the stock has been for the last two months.
"Our channel checks indicate iPhone XS and iPhone XS Max weekend sales are higher than iPhone X weekend sales," Zhang writes. "We believe this is mainly due to a better production ramp for the iPhone XS and iPhone XS Max. However, our research suggests the iPhone XS order pipeline is very weak, resulting in leftover inventory of the iPhone XS. We continue to believe total iPhone XS and iPhone XS Max sales will be lower than total iPhone X sales over a two-month period."
"Overall, we believe iPhone XS and iPhone XS Max weekend sales were weak," Zhang continued. "Based on retail sales data and our estimates of production, we estimate a combined total of ~7 million units sold over the weekend. Our research suggests the iPhone XS max sold out over the weekend, while the iPhone XS still had some inventory left in various retail channels. We believe iPhone XS Max sales were about 4-5x iPhone XS sales over the weekend."
Zhang also predicted an iPhone production cut for the second half of this year, from 15 million units to 10 million units.
However, as AppleInsider's Daniel Eran Dilger showed last week, Zhang and his "channel checks" have often been very wrong about iPhone demand in the recent past, most notably about the iPhone X. He was also one of many analysts whose unwarranted skepticism about that model's performance was frequently parroted in the financial and tech press throughout the past year. And Zhang's argument — that wait times for preorders is an accurate measure of overall demand — is a faulty one.
Zhang had stated, prior to the release of the new iPhones, that preorders were "weaker" than those of the iPhone X in 2017. The iPhone X, despite its higher price point, went on to outsell all other iPhone models in each quarter since its release.