iPhone X issues are set to take a bite out of Apple's profits

 
Courtney Goldsmith
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Apple said demand for its iPhone X was "off the carts" after pre-orders opened last week (Source: Getty)

Manufacturing setbacks for Apple's new £1,000 iPhone X are expected to hit the firm's full-year profits this week.

The tech giant's premium iPhone X sold out almost instantly last week, but customers were upset to find delivery estimates climbing just minutes after pre-orders opened.

While demand for the X has been strong, reports of manufacturing issues mean the coveted device is going on sale two months after its release date, and demand is far outpacing supply.

Meanwhile, the more budget friendly iPhone 8, which has fewer high tech tweaks, has gone on sale as scheduled, but demand has been weak as consumers favour waiting for the X.

Recent analysis showed more people were buying last year's iPhone 7 than the iPhone 8.

"The weakness in the iPhone 8 probably is more due to strong demand for the X than a disappointing cycle though further data is needed, especially regarding a potential rebound in China," said Steven Milunovich, analyst at UBS.

Apple will report its full-year and fourth quarter results on Thursday, 2 November. UBS expects it to unveil iPhone sales of around 45m, which is flat on last year, causing revenue to fall below the consensus. Milunovich expects earnings per share to be in line at $1.85.

Apple's share price rose more than three per cent on Friday nearing an all-time high after the tech firm said pre-orders for its 10th anniversary X were "off the charts".

However, the firm has had to deny reports that manufacturing issues had caused it to allow suppliers to reduce the accuracy of the X's face-recognition technology, which would open it up to security issues.

Read more: Crunch time for Apple as iPhone fanfare fades

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