The big question for Apple is how many people are waiting for the iPhone X
Two new iPhones went on sale this weekend, but lines were not as long as they’ve been for previous iPhone launches.
This has investors and analysts asking: Are Apple customers and fans passing on the iPhone 8 and waiting to see the $999 iPhone X?
The iPhone X will be the most expensive and technologically advanced iPhone when it hits stores November 3.
Wamsi Mohan, an analyst at Bank of America Merrill Lynch, said in a research note published Monday that it was too early to say whether the iPhone 8 was a hit, because the iPhone X isn’t available yet.
“Our availability tracker suggests that iPhone 7/7 Plus demand was slightly higher this time last year, but we attribute that to the staggered launch of the new iPhones where a significant number of consumers are likely waiting to order the iPhone X (pre-orders start later on Oct 27th),” Mohan wrote.
Citi analysts dropped their estimates on Monday for Apple’s September quarter to reflect “more modest iPhone 8 and 8 Plus demand.”
Apple hasn’t yet said anything about iPhone 8 sales, except for a quip by CEO Tim Cook that he “couldn’t be happier” with the launch on Friday.
“We’ve sold out of iPhone 8 and 8 Plus in some stores, but we’ve got good supply there,” Cook said.
Apple used to give investors a big hint about the success of new iPhones are by putting out a press release with selected statistics after an iPhone launch weekend. But it discontinued the practice last year and has shown no signs that it will bring it back.
Apple issued strong guidance for the September quarter, which will end up containing a few weeks of iPhone 8 sales. But part of Apple’s aggressive revenue forecast of $49 billion to $52 billion may be that it raised prices on the iPhone 8 and iPhone 8 Plus over what the iPhone 7 series cost when it first went on sale.
The bottom line is that Apple is going to sell tens of millions of iPhones before the end of the year — it’s just a question of what the mix of lower-cost and higher-cost iPhones will be.
The combination of possible iPhone X shortages and seemingly weak demand for the iPhone 8 means Apple might turn in a disappointing quarter or two before iPhone X supply catches up to demand and pushes the sales “supercycle” some analysts have been hoping for.
And soft demand for the iPhone 8 would most likely mean that when Apple starts selling the iPhone X, there will be a lot of clamor for it. On Monday, the KGI Securities analyst Ming-Chi Kuo estimated that preorder demand for the iPhone X could top 40 million or 50 million units, with tight supply until the first half of next year.