The iPhone 8 and 8 Plus were already declared ‘obsolete‘ by many due to the iPhone X, which is arguably the biggest iPhone upgrade in years. A large section of potential buyers is holding out for the iPhone X rather than buying the iPhone 8, which is only a minor upgrade over its predecessor. The iPhone 8 and 8 Plus look like the iPhone 7 and 7 Plus, though they come with wireless charging (which sucks, by the way), a faster processor, and an improved camera. Surprisingly, most people unwilling to shell out $1,000 for the iPhone X want to buy iPhone 7 rather than the iPhone 8.
Why are more people opting to buy iPhone 7?
It indicates that consumers don’t find the iPhone 8 a worthy upgrade. Traditionally, the newly launched iPhones see a huge demand, selling out within days after launch. However, the iPhone 8 and 8 Plus sales have been weaker than in previous years due to the imminent release of the iPhone X. Another factor hurting the iPhone 8 sales is that people are eager to buy iPhone 7. The last year’s model is doing better than the latest model, according to an analyst.
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KeyBanc Capital Markets analyst John Vinh told investors that the iPhone 7 sales are much stronger than the iPhone 6S sales when the iPhone 7 debuted last year. The analyst surveyed carrier stores in the United States and the United Kingdom, and concluded that the iPhone 8 isn’t as popular as its predecessors. The survey revealed that “a meaningful portion” of customers went on to buy iPhone 7 instead of the iPhone 8 due to the “lack of significant enhancements in the new phone.”
The iPhone 8 and 8 Plus have a glass back to facilitate wireless charging based on Qi standard. Right now, you have to rely on third-party charging mats to take advantage of wireless charging. Apple’s own AirPower charging pad is still several months away. The new iPhones also have an improved A11 Bionic chipset. The survey suggests that most consumers don’t find these upgrades exciting enough to shell out an extra $150 or so.
The iPhone 8 has a starting price of $699 for the 64GB model in the US. The iPhone 7 has received a price cut, and is now selling at $549. Retailers and carrier promotions have made the iPhone 7 even more affordable. John Vinh added that carrier deals for the iPhone 8 and 8 Plus have been far more modest than they were for the iPhone 7 and 7 Plus last year. AT&T said smartphone upgrades declined by nearly 900,000 during the September quarter compared to the same period a year ago, largely due to weak iPhone 8 sales. Last year, Apple had sold a record 78.3 million iPhones during the holiday quarter.
The Cupertino company used to reveal the opening weekend iPhone sales numbers in the past. But it stopped releasing the sales numbers with the iPhone 7 last year, saying it often sells as many units as it could make. We can expect to get a glimpse into the iPhone 8 and 8 Plus sales on November 2, when Apple will report its quarterly results. Vinh said the lukewarm iPhone 8 sales were “modestly worrisome.”
iPhone 8 buyers show clear preference for the larger Plus model
Drexel Hamilton analyst Brian White said demand for the iPhone 8 and 8 Plus was “muted.” Brian White added that his contacts in China and Taiwan see a theme around people opting to buy iPhone 7. However, customers who do go for the iPhone 8 series have shown a preference for the larger (and more expensive) iPhone 8 Plus, which sports a dual camera system. Drexel Hamilton remains bullish on Apple with a price target of $208. White told investors that consumers are waiting for the 10th-anniversary iPhone X.
The iPhone X has a glass and metal design with a bezel-less 5.8-inch OLED display. It is jam-packed with exciting new features such as augmented reality, animoji, FaceID facial recognition system, an A11 chipset, and more. However, Apple is facing production issues with the FaceID 3D sensors, which would affect the number of units Apple could ship this holiday season. Analysts expect the iPhone X demand to exceed 50 million units, but the company might be able to ship only 30-35 million units during the holiday quarter. The rest of the orders won’t be delivered until early 2018.
Apple ships first batch of the iPhone X
A report coming out of China suggests that Apple has shipped the first batch of the iPhone X, consisting of only 46,500 units, to the Netherlands and the United Arab Emirates. DigiTimes added that Apple’s manufacturing partner Foxconn has ramped up production from 100,000 units a week previously to 400,000 iPhone X units per week now. Production is expected to go up further in the coming weeks because 400,000 units per week is not sufficient to meet the global demand for the 10th-anniversary handset.
The iPhone 8 has also suffered from the reports of battery swelling. There have been more than half a dozen reports of the phone’s battery swelling out and pushing the screen to detach from the frame. Apple has been investigating the issue. For now, it doesn’t appear to be as bad as the Galaxy Note 7 debacle, but it may hurt the iPhone 8 sales if more reports start surfacing.