Shares of Austrian chipmaker AMS tumbled as much as 14 percent after the supplier to tech giant Apple warned of a major customer’s continued delays in finalising product plans, dealing a blow to its second-quarter outlook. Apple, which analysts estimate is responsible for half of AMS revenue, is winding down production of its iPhone X line before gearing up for new products in the autumn. Although that transition was widely expected, the impact on AMS is magnified by the U.S. company’s delays in finalising parts specifications.
AMS sensors are used by Apple to deliver face-recognition features that make its flagship iPhone X stand out from rival smartphones and the Austrian company is widely expected to win follow-on contracts for the next iPhones and iPads.
“Due to these product transitions and product changes in a major consumer programme preventing pre-production of parts, AMS also expects a significant under-utilisation of capacity,” the company said.
What might be the reasons behind such a massive failure for iPhone X?
One of the biggest reasons behind such big non-success can be credited to the whopping price of the Apple smartphone. India which is dubbed as the biggest market for Apple – the Cupertino-tech giant has priced the 64GB variant at Rs 82,900 while 256GB variant is price tagged at Rs 98,999. With such a big price, buyers can go for other smartphones with similar features.
Also, Apple no longer has a monopoly on quality. Samsung’s most recent releases are half the price of iPhone X’s price. Thir flagship smartphone Galaxy S9 Plus is priced at Rs 64,900. Apart from Samsung, there are now many phones that are nearly as serviceable, including the OnePlus 5T. Even Apple’s own iPhone 8 Plus, which costs Rs 62,999 is less than the X, and shares most of the same components, barring the display.