'Anemic' iPhone 8 demand drags Apple shares lower

Apple Inc's (AAPL.O) shares fell nearly 3 percent on Thursday on signs of weak demand for the iPhone 8 that caused analysts and investors to question the company's staggered release strategy for its latest phones.
 
Wireless carriers in the United States and Canada have reported slow third-quarter customer upgrades. While some expect a pickup after the iPhone X goes on sale in November, others cautioned that phone's high price tag could weigh on demand.
 
The chief executive of Rogers Communication (RCIb.TO), Canada's largest mobile network, on Thursday said appetite for the iPhone 8 and 8 Plus, which went on sale in September, had been "anemic," the latest sign of weak sales for those phones ahead of the Nov. 3 launch of the pricier iPhone X.
 
But some analysts said overall phone production looked in line with their earlier expectations, and that it is unclear whether weak iPhone 8 sales would hurt iPhone revenue and margins because users may still be buying more profitable older models with more memory.
 
Verizon Communication Inc's (VZ.N) Chief Financial Officer Matt Ellis said the number of third-quarter phone upgrades fell versus previous years, but that he expected an upgrade surge when the iPhone X is released.
 
"I think what you're seeing there is a difference in timing of some of the new devices coming out versus what we've historically seen," Ellis told an earnings call.
 
"As we get into the holiday season, some of those new devices come out, we think we will see strong demand."
 
The uncertainty about demand coupled with a Taiwan media report of a cut in iPhone 8 production pushed Apple shares down 2.8 percent by midday.
 
"The Street is hyper-sensitive to any speed bumps around this next iPhone cycle and (that) speaks to the knee-jerk reaction we are seeing in shares," said Daniel Ives, chief strategy officer at GBH Insights in New York.
 
"iPhone 8 demand has been naturally soft out of the gates with the main event being the iPhone X launch in early November. (But) this is the early innings of what we believe is the biggest iPhone product cycle with X leading the way."
 
U.S. wireless carrier AT&T (T.N) said last week its third-quarter postpaid handset upgrades were down by nearly 900,000 from a year ago.
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