Apple Inc. shares surged by almost half last year on predictions that Apple’s 10th anniversary iPhone would be a runaway hit.

But demand for the flagship handset, the iPhone X, hasn’t met the most optimistic expectations, according to securities firms including Sanford C. Bernstein, which ratcheted back estimates for the number sold by Apple in recent months. The suspense ends Feb 1, when Apple reports fiscal first-quarter results and provides forecasts for the current quarter.

”Investors are increasingly aware that this iPhone cycle will very likely bedisappointing relative to initial expectations,” Toni Sacconaghi, an analyst at Bernstein, wrote in a research note Jan 29.

Total sales climbed 11% in the December quarter, analysts predict, buoyed by higher average selling prices for phones and a deeper push into services such as apps, music and cloud storage. Even so, that’s just over one-third the pace of growth in the holiday quarter three years earlier, when Apple introduced larger iPhones, kicking off what’s known as a super cycle – a wave of device upgrades by existing users and first-time adoption from new customers – and fueling the share surge that made Apple the most valuable public company.

Apple stock has slumped about 7% since closing at a record on Jan 18, as analysts stoked iPhone demand concerns. Ming-Chi Kuo, at KGI Securities, warned that iPhone X sales weren’t as strong as anticipated in China. JPMorgan wrote that “demand has gone sour quickly”, and a survey by Consumer Intelligence Research Partners found iPhone X models made up just a fifth of iPhone sales in the holiday quarter.

This “may dash hopes of an iPhone X sales super-cycle akin to the iPhone 6,” analysts at Bloomberg Intelligence wrote in a recent research note.

The latest wave of bearishness came Jan 29 after Nikkei reported that the company told suppliers it was cutting the iPhone X’s production target in the current quarter by half due to slower-than-expected sales in the holiday season.

However, an executive at Apple supplier Murata Manufacturing Co told Reuters that the Nikkei report overstated output cuts. And Apple often reduces orders after the holiday season. Apple declined to comment, but Chief Executive Officer Tim Cook addressed similar questions during a first-quarter 2013 conference call with analysts.

”It’s good to question the accuracy of any kind of rumour about build plans and also stress that even if a particular data point were factual, it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex,” he said.

Even if consumers are buying fewer iPhones than predicted, they’re paying more, on average, for the devices they do purchase. The iPhone X, which went on sale in November, comes in US$999 (RM3,897) and US$1,149 (RM4,482) configurations, at least US$150 (RM585) more than any iPhone starting price that came before it. The new iPhone 8 and iPhone 8 Plus handsets also start at US$50 (RM195) more than their predecessors.

”Given Apple’s expanded price points and lineup, investors will have to absorb the concept of revenue, versus just looking at the unit number,” Shannon Cross, an analyst at Cross Research, said.

Apple shipped 80 million iPhones in the holiday quarter of 2017, with an average iPhone selling price of US$819 (RM3,195), up from US$695 (RM2,711) a year earlier, according to a Bloomberg survey of seven analysts. Morgan Stanley analysts are looking for an ASP of US$819 and total revenue of US$92.2bil (RM359.68bil), ahead of consensus estimates.