More and more data points are suggesting that iPhone 8 demand is leaving much to be desired, except in China, and one firm has released its own analysis which suggests what the real problem is. During the first month of the iPhone 8’s availability, it was clear that mid-range iPhones lost out. iPhone 8 Plus sales were better than iPhone 8 demand, and lower-end models did well too.

However, as has been the case with every iPhone survey for the last several months, the numbers are all over the place, and Apple won’t provide any clarity on the model mix thus far.

iPhone 7 outsold iPhone 8, 8 Plus combined: Canalys

Late last week, Canalys reported that the iPhone 7 was selling better than the iPhone 8 and 8 Plus after the latter two became available. The firm said Apple shipped 46.7 million iPhones during the third quarter, of which 11.8 million were the iPhone 8 and 8 Plus. Last year at the same time, Apple shipped 14 million iPhone 7 units. This finding isn’t exactly a big shock because it simply quantifies KeyBanc’s recent finding that the iPhone 7 is more popular than the 8.

One addition in Canalys’ report was that the iPhone 8 Plus was the first Plus model to outsell its smaller sibling, and data from Consumer Intelligence Research Partners corroborates this. A little over half of the units sold in the first 30 days after the 8 and 8 Plus launched were one of the two new models, versus more than 70% of the mix in previous cycles, UBS analyst Steven Milunovich said in a note this week.

iphone 8 demand

He added that 49% of the iPhones sold were Plus models, versus 44% in previous years, and that the Plus models are outselling their smaller siblings both in the 8/ 8 Plus and across the rest of the line.

iphone 8 demand

Skew noted toward both extremes

Milunovich also reported that the CIRP data indicates strength at the top and bottom of the iPhone line-up with cheaper models and the iPhone 8 Plus selling better than the models in between. Ten percent of the units sold were the iPhone 6s, while 7% of them were the iPhone SE. In general, he sees the weak iPhone 8 demand as being a positive for the iPhone X.

iphone 8 demand

Bulls will be bulls and bears will be… you know

Naturally, bulls and bears will interpret these data points however they like. The apparent preference for cheaper iPhone models could be bad for the iPhone X, although bulls will again argue that Apple fans are waiting for the iPhone X, which is why the 8 and 8 Plus aren’t doing as well. UBS is a case in point here:

iphone 8 demand

Believe it or not, there are a few firms that would probably argue the bearish view, which is that the weak iPhone 8 demand in favor of cheaper models is a bad omen for iPhone X sales. The reality is that both bulls and bears will probably be somewhat right, and the real results will be somewhere in the middle.

Aging installed base seen as a positive

The big problem Apple has is the production problems with the X. Even fans have limits on how long they will wait, whether it’s because their iPhone broke and they had to buy a new one or because their iPhone is so old that it’s having problems. Upgraders accounted for 86% of the iPhones sold during the third quarter, which Milunovich said is a record high. This is particularly interesting because the iPhone X wasn’t even out yet, so upgraders were moving to one of the less expensive models.

Once again, bulls and bears will see this in totally opposite lights, and of course, Milunovich sees the iPhone’s aging installed base as a positive for the iPhone X, particularly based on the buying intent data from 451 Research. Bears, on the other hand, will note that those who held on to their iPhones for a longer time have thus far tended to opt for the older and least expensive iPhone models.

iphone 8 demand

Some have begun to debate whether the weak iPhone 8 demand will result in a price cut for the handset, so we’ll just have to wait and see. Apple probably wants to see how well the extra-pricey iPhone X sells, but that will be hard to gauge for quite some time because of all the stock-outs.

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