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Slower Than Expected iPhone X Sales Likely To Hurt Apple's Earnings

STEVE INSKEEP, HOST:

Apple is preparing to release quarterly earnings, and Wall Street is a bit nervous. NPR's Laura Sydell reports that Apple's costly and much-hyped iPhone X apparently isn't selling as expected.

LAURA SYDELL, BYLINE: Apple marked the 10th anniversary of the release of the iPhone last year with an event in its new headquarters and with the release of a special edition. Apple CEO Tim Cook.

(SOUNDBITE OF ARCHIVED RECORDING)

TIM COOK: We are here in this place on this day to reveal a product that will set the path for technology for the next decade.

SYDELL: That's a tall order, and it came with a tall price tag.

ANDY IHNATKO: It does look like the iPhone X, their new thousand-dollar phone, was not selling as well as they had hoped and certainly not as well as analysts thought.

SYDELL: Andy Ihnatko is a tech writer who follows Apple. The iPhone X sold well during the holidays, but Ihnatko says that analysts are following Apple's supply chain and makers of various iPhone components who say that Apple has cut back on orders. Ihnatko says part of it may be that thousand-dollar price tag. But he says the market for smartphones is getting saturated, and people are waiting longer to upgrade.

IHNATKO: The growth curve was just huge over the past several years. Now even the Chinese market, which they were working really, really hard to get into - even that market has started to get saturated.

SYDELL: And then there's the tension over trade with China. It hasn't affected Apple yet, but as a company that sells and produces in China, a trade war could have a big impact. Julie Ask is a tech analyst with Forrester Research. She thinks that going forward, Apple is going to have to find growth elsewhere.

JULIE ASK: Selling consumers more devices like watches and smart speakers and so forth and then really, you know, juicing up the services side of their business.

SYDELL: Like the music service, cloud storage, Apple Pay. Still, there are those who think there's still gold in them iPhone hills. Daniel Eran Dilger is a contributing editor to AppleInsider, an Apple news site. He says analysts have been predicting the slowing of iPhone sales for years.

DANIEL ERAN DILGER: Those articles really haven't been true. They're actually consistently wrong and have been for many years.

SYDELL: Eran Dilger doesn't think a thousand bucks for an iPhone is discouraging anyone. Apple has always set itself up as a premium brand, the one everybody would prefer to own. Eran Dilger thinks if there's any hype, it's coming from the people predicting Apple will disappoint. Laura Sydell, NPR News.

(SOUNDBITE OF KLIMEKS' "DON'T LET GO") Transcript provided by NPR, Copyright NPR.

Laura Sydell
Laura Sydell fell in love with the intimate storytelling qualities of radio, which combined her passion for theatre and writing with her addiction to news. Over her career she has covered politics, arts, media, religion, and entrepreneurship. Currently Sydell is the Digital Culture Correspondent for NPR's All Things Considered, Morning Edition, Weekend Edition, and NPR.org.