The largest cellular carrier in Canada has some bad news for Apple (AAPL, RCI)

Tim Cook

The CEO of Rogers Communications gave some details about iPhone demand during an earnings call.
He said he's seeing "anemic appetite" for the iPhone 8 models currently on sale.
He also said it there were still questions about how many iPhone X units Rogers will receive.

The CEO of Canada's biggest wireless carrier did not mince words when he was asked about what trends he's seeing in iPhone sales.

He said that demand for the iPhone 8 was "anemic," and also suggested there was a chance Rogers wasn't going to have a lot of iPhone X units in stock when it goes on sale on November 3.

"Inventory is a question mark in terms of what we will get," Rogers CEO Joe Natale said on Thursday's quarterly earnings call.

"The question will be is how much of the iPhone X activity happens in Q4 versus Q1 of next year, and we will kind of be prepared for either overall," he continued.

The biggest question for Apple investors and analysts at the moment is if iPhone 8 sales are suffering ahead of the iPhone X launch. Apple launched two new lines of iPhone this year: The iPhone 8 models, which are incremental improvements to previous versions, and the iPhone X, a $999 device that has facial recognition and a new kind of display.

Many analysts believe that Apple fans and customers may be waiting to try out the iPhone X and passing on the iPhone 8, which went on sale in September.

The Rogers CEO's comments on won't tamp down those fears.

Here's the full transcript of his comments (emphasis ours):

Vince Valentini, Analyst with TD Securities

"Two things: the guidance range for the year obviously impressive, 5% to 6%. Can you give us any thoughts on iPhone X and how you thought about that in the guidance? Is it -- if we get an unusually large supply of the devices and they're very popular, which I don't think is the base expectation, but if that were to happen is that buffered in the low end of the new guidance?

"And then second, just the dividend. I mean everything is trending, right? Your debt's coming down, your EBITDA is better than expected. I mean, we can run the math on the payout ratio. Is there anything beyond the math, that we need to think about in terms of dividend growth resuming? Is there anything strategically or big picture that would perhaps stop the dividend from going up in January when you report Q4?"

Joe Natale, President and CEO of Rogers Communications

"Let me start with the iPhone and, Tony, you can pick up on dividends.

"On the iPhone side, to your comment, Vince, analysts have said it's more incremental in terms of product evolution rather than transformational. And what we're seeing is sort of, I would say, a more anemic appetite for the iPhone 8 right now. There is lots of anticipation around the iPhone X and what it has to offer.

"The thing -- the feature that people are most excited about seems to be augmented reality feature that's available on both the 8 and the X. It's something that will drive network traffic, so it'd have some potential interesting upside for us if that comes to materialize overall. Our timing is aligned with the US. In terms of timing, we expect to take pre-orders on October 27 and launch on November 3.

"Couple things to bear in mind is that the iPhone 10 price point is about 75% higher than the iPhone 7, so it's a very expensive device. Inventory is a question mark in terms of what we will get. We do have reflected in our guidance what we believe is the right balancing factor around how much inventory we'll get, the appetite for the device, the price point, et cetera, so we feel comfortable reflecting that in our guidance.

"The question will be is how much of the iPhone X activity happens in Q4 versus Q1 of next year, and we will kind of be prepared for either overall."

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