Technology

iPhone X Supply Improves But It’s No ‘Supercycle’

Following the iPhone X launch, Apple said the consumer response was “off the charts.” The delivery estimates were pushed back by 5-6 weeks within minutes of the pre-orders going live. Demand for the device only grew stronger during the Black Friday and Cyber Monday sales. Fortunately, Apple has been consistently improving the iPhone X supply, and now the shipping estimates for new orders have come down to just 1-2 weeks. Depending on the storage and color option you want, you may be able to pick an iPhone X from a nearby Apple Store right now.

Apple iPhone X Supply Shortages
Image Source: Apple.com (screenshot)

It’s going to be ‘a solid year’

In the run-up to the iPhone X launch, most Wall Street analysts were talking about a so-called “supercycle” that would trigger massive upgrades through 2018. Their belief was that Apple hadn’t changed the iPhone design for at least three years, and millions of existing iPhone owners were waiting for an iPhone with a new form factor and cool new technologies. The iPhone X delivered just that. The iPhone X supply shortages added to the belief. But it’s not a ‘supercycle,’ says a respected Apple analyst.

UBS Securities analyst Steven Milunovich told investors that the fiscal year 2018 would be “a solid year” rather than a “supercycle.” Of course, the iPhone X would lead to growth in the iPhone sales, but it won’t be a “supercycle” growth rate that many were hoping for. Milunovich believes Apple has hit the ceiling in the US market. The only way it could sell more iPhones is to increase its market share.

Citing Milunovich, Business Insider says there are about 320 million people in the US, and only 48% of them own an iPhone. Considering a two-year upgrade cycle, there would be roughly 75 million people in the US looking to upgrade their iPhones each year. Also, the iPhone X’s higher price tag might have turned off a lot of customers. The iPhone 8 and 8 Plus retain the same three-year-old design.

Milunovich added that Apple’s focus should be on monetizing its massive installed base through services. Apple’s services business has been growing consistently over the last few years. Services generated $8.5 billion or 16% of Apple’s total revenue during the latest quarter. UBS Securities has a $190 price target on the Apple stock.

iPhone X supply to improve further in the coming weeks

KGI Securities says in a research note (via Apple Insider) that Apple has significantly enhanced the iPhone X supply. The reduced delivery times are due to increased production rather than a decline in demand. Ming-Chi Kuo of KGI Securities said the in-store inventories would continue to improve in the coming weeks. The drastic reduction in delivery estimates had fueled speculations that the iPhone X demand might be weakening.

Kuo says Apple and its suppliers have addressed all the production bottlenecks that affected the iPhone X production for months. Apple has also added more suppliers for a few components to meet the demand. Foxconn is now assembling 450,000 to 550,000 iPhone X units per day. The analyst believes the holiday quarter shipments could be 10-20% higher than previously estimated.

Face ID is not foolproof

The iPhone X is the most innovative iPhone in years. It comes with a radical new Face ID facial recognition technology, Animoji, Portrait Lighting, a bezel-less OLED display, wireless charging, and many other features. Since the iPhone X launch, many users and experts have tried to fool the Face ID, but only a few have been successful. Apple claims there is only one in a million chance a random person would be able to unlock your iPhone X using Face ID.

Earlier this month, we saw a video where a 10-year-old son was able to unlock his mother’s iPhone X. The son looks a lot like his mother, but that’s no way to justify the Face ID’s failure to recognize the registered user. Vietnam-based security research firm BKAV has also been able to fool the Face ID using a mask that cost them just $150 to build. At the time, many questioned BKAV’s claims because the security firm had not revealed their detailed process.

Now, BKAV has once again been able to trick the Face ID using another mask. The tests show that Apple’s facial recognition system is not foolproof. But casual users need not worry, said BKAV. Your acquaintances or petty thieves are unlikely to spend so much time and resources to gain access to your phones. It is a cause of worry for billionaires, politicians, intelligence agents, and celebrities.