Fear not, Apple Inc. (AAPL) bulls. 

Not everyone on Wall Street is convinced that the tech giant is being hit with sluggish demand for the pricey 10th anniversary iPhone X.

Several analysts maintain that consumers in the U.S. and China are still scooping up the iPhone X, which could generate upside for device sales in the coming quarters. 

Shares of Apple were down slightly to $170.39 on Wednesday afternoon, a day after falling 2.5% following a report that Apple plans to cut sales estimates for the X to 30 million from 50 million for the fiscal 2018 first quarter. Additionally, two China-focused research firms on Tuesday projected lower iPhone X sales, citing the phone's $1,000 price tag as a sticking point for many consumers.

The iPhone X's facial recognition technology is powered by a 3-D sensor, which may have caused supply chain issues.
The iPhone X's facial recognition technology is powered by a 3-D sensor, which may have caused supply chain issues.

The pullback in Apple's stock has diminished predictions that it could be the first company to hit a $1 trillion market cap by year's end. As of Wednesday morning, Apple's market capitalization stood at just over $874 billion.

Longtime Apple analyst Gene Munster of Loup Ventures countered analysts' bearish iPhone X claims, however. Since its introduction in September, Munster said that iPhone X demand has been robust.

"We think demand for the iPhone X is healthy based on how tight supply has been over the past two months," said Munster. "Supply is just now catching up."

Even if Apple produces 30 million iPhone X units during the March quarter, that's still higher than consensus estimates of 25 million units, Munster added. Wall Street is predicting that Apple will sell a total of 62 million units -- which includes sales of the iPhone X, 8/8 Plus and older models as the iPhone 7 -- during the March quarter. 

Bearish Apple analysts maintain that Apple's wide range of iPhone options has led to a slump in demand for the iPhone X -- the most expensive version of its flagship device ever. In a Tuesday report, tech research firm Consumer Intelligence Research Partners (CIRP) found that the iPhone 8 and 8 Plus outsold the iPhone X in the first 30 days after the iPhone X's release. The iPhone X, which began shipping on Nov. 3, also saw competition from sales of the iPhone 7/7 Plus, the firm added. 

CIRP and other industry watchers argue that the iPhone X doesn't have enough compelling new features for consumers to shell out the extra cash or upgrade to it from existing models. Munster disagreed, however, arguing that the iPhone X's standout features such as facial recognition, an edge-to-edge organic LED (OLED) screen and augmented reality technology have caught the eye of consumers. 

"I think iPhone X will still power upside to the story over the next two to three quarters given it's a new form factor, and new form factors tend to outpace more subtle updates," he added. 

Apple's stock has also come under pressure at times in recent months due to concerns about supply constraints for some of the iPhone X's more advanced components, including its 3-D sensing technology and OLED screen. Apple suppliers may have encountered issues with producing the components at scale with the iPhone X's massive sales volume. 

Yet 3-D sensing and OLED panel suppliers to Apple haven't reported any order cuts during the holiday season, which may indicate that those issues have subsided, according to Rosenblatt Securities. The firm added that supply checks in China and the U.S. show healthy demand for the iPhone X. 

"We believe iPhone X sales were stable in the North American market throughout the holiday season and has likely seen an acceleration in China's market over the last two weeks," Rosenblatt Securities analyst Jun Zhang wrote in a Tuesday note. 

Munster pointed out that it's customary for Apple to give inflated production targets in the fall and then "to dial them back in December." 

Apple has trimmed overall iPhone production in the March quarter for at least the past two years due to excess inventory. At the time, analysts cited similar concerns of low upgrade intent, driven by the fact that the devices had few compelling new features. 

"The reason why Apple changes what it tells suppliers in terms of production at this time of the year is because in the fall they tell suppliers they need to produce more than Apple will actually order," Munster explained. "Apple does this to make sure the suppliers are ready for the spike in demand." 

Apple is able to more effectively balance its supply chain by setting a high bar for demand, he added. It then moderates this view in December as supply and demand begin to balance each other out. 

"In this case, that revised view is lower than what they said in the fall, but is still ahead of investor expectations," Munster said. 

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL? Learn more now.

More of What's Trending on TheStreet:

 

More from Stocks

Everything You Need to Know About Closed-End Funds to Boost Your Portfolio

Everything You Need to Know About Closed-End Funds to Boost Your Portfolio

Tilray and Other Cannabis Firms Have Even More Catalysts on the Horizon

Tilray and Other Cannabis Firms Have Even More Catalysts on the Horizon

Was Tilray's Wild Day Sign of a Market Top?

Was Tilray's Wild Day Sign of a Market Top?

Dow Ends Higher on Possible Trade Thaw; Tilray Up Sharply

Dow Ends Higher on Possible Trade Thaw; Tilray Up Sharply

Tilray Shares Are Going Absolutely Haywire -- Here's Why

Tilray Shares Are Going Absolutely Haywire -- Here's Why