The iPhone X is the best smartphone Apple has ever made. It will define the next decade of smartphones. But the phone’s debut was marred by constrained supply and a ridiculously high price tag. Apple was able to improve the supply within weeks of launching the anniversary iPhone. Many expected the iPhone X to shatter all the records for iPhone sales. But that didn’t happen. In fact, the iPhone 8 and 8 Plus outsold the iPhone X during its launch month.
iPhone 8 and 8 Plus accounted for 40% of iPhone sales
Data from Consumer Intelligence Research Partners (CIRP) showed that the combined sales of the iPhone 8 and 8 Plus were higher than iPhone X during the anniversary model’s first month of availability. That’s surprising because the iPhone 8 and 8 Plus had been around for about six weeks when the iPhone X launched. Many customers looking to upgrade their older iPhones had already purchased the iPhone 8 or 8 Plus before the iPhone X arrived.
Apple hasn’t officially revealed how many iPhone X units it has sold. CIRP sheds light on how different iPhone models sold during the first month of the anniversary iPhone’s availability. The research firm found that the iPhone X accounted for 30% of the total iPhone sales. By comparison, the iPhone 8 and 8 Plus together accounted for 40% of the total sales. The smaller iPhone 8 was at around 23% while its larger sibling was at 17%, according to 9to5Mac.
The iPhone 7 and 7 Plus that are more than a year old are still selling pretty well. The last year’s iPhones captured 20% sales. To put things in perspective, the iPhone 7 and 7 Plus had accounted for nearly 70% of sales during their first month of their availability in 2016. ValueWalk has reported earlier that the iPhone 7 and 7 Plus sales got a boost in September when Apple slashed their price.
The numbers suggest that the iPhone X’s bezel-less OLED display and the new TrueDepth camera aren’t enough to justify its $999 base price, which goes up to $1149 for the 256GB model. At least that’s what most consumers think. CIRP says the supply constraints in November hurt the iPhone X sales to some extent. Thankfully, the supply issues have been resolved now.
It’s a bit of a disappointment
CIRP partner and co-founder Josh Lowitz said it was difficult to say whether the anniversary model met, exceeded, or missed expectations. It’s because this is the first time Apple has launched three iPhones like this. However, it was a “disappointment” that the iPhone X accounted for less than one-third of the US unit sales during its launch month despite so much hype and publicity.
Lowitz added that many buyers might have been holding out to see how the iPhone X looks and feels and how it is received by the market before deciding which phone to buy. After the iPhone X hit the store shelves, they opted to buy the more affordable iPhone 8 or 8 Plus models. Many other customers chose to buy the even cheaper iPhone 7 or 7 Plus as they saw little difference between the iPhone 7 line and the iPhone 8 series.
iPhone X demand expected to decline in March quarter
Apple is expected to reveal the iPhone sales numbers next month during the quarterly earnings call. The tech giant expects holiday quarter revenues between $84 billion and $87 billion. Loup Ventures analyst Gene Munster predicts the iPhone X would boost the iPhone’s average selling price from nearly $610 in the fiscal year 2017 to $740 in FY2018.
Apple shares plunged on Tuesday after Taiwan-based Economic Daily News reported that the company has lowered the iPhone X sales forecast for the March quarter. According to the publication, Apple expects to sell 30 million iPhone X units in March quarter. Following the report, Sinolink Securities analyst Zhang Bin slashed their shipment forecast from 45 million to 35 million units for the March quarter. Zhang cited the lack of innovative features and the high price of the device for the weaker than expected demand.
JL Warren Capital expects the Cupertino company to ship 25 million iPhone X handsets, down from their previous estimate of 30 million units. Apple CEO Tim Cook has said earlier that the iPhone X pre-orders were off the charts and that he “couldn’t be happier” with the iPhone X sale in China, the world’s largest smartphone market.
iPhone X sales remain strong, production cut reports incorrect
Rosenblatt Securities analyst Jun Zhang has rubbished the reports of the falling iPhone X demand. Zhang maintained their first-quarter shipment estimate of 35 million units. Rosenblatt Securities reiterates its Buy rating on the Apple stock with a $180 price objective. Zhang said there are “no further order cuts after the holiday season.”
Rosenblatt Securities said the Taiwanese media and other outlets might have confused the markets by referring to the previously mentioned iPhone 8 and 8 Plus production cuts following the anniversary iPhone’s launch. The iPhone X shares many components with the iPhone 8 and 8 Plus. The reports of Asian suppliers scaling down production has to do with the iPhone 8/8 Plus rather than the X.
Rosenblatt Securities said there were no order cuts at the OLED display and 3D sensor suppliers. Both these components are used only in the anniversary iPhone. The anniversary model enjoyed “stable” sales in the North American market throughout the holiday shopping season. The most expensive iPhone has seen robust sales in China, said Jun Zhang.