It has been almost six weeks since the iPhone X went on sale, but Apple hasn’t revealed the iPhone X sales numbers. The tech giant has only said that the demand had been “very strong.” The drastic decline in the delivery times from 5-6 weeks in early November to just a couple of days now has sparked speculations that demand might have cooled off, though some argue that the improved availability is due to the increased production.
iPhone X sales not strong enough to call it a ‘super cycle’
Cowen & Company analyst Karl Ackerman told investors (via Bloomberg) that more and more Apple customers are opting for cheaper models such as the iPhone 7 series and iPhone 8 series. The analyst believes the anniversary iPhone doesn’t have enough new technologies to justify its $1,000 price tag. It looks like Face ID and the animated poop emoji aren’t enough to get customers to part with their thousand dollars.
Ackerman said he was “increasingly concerned” that the iPhone X sales had been “below initial expectations” as Apple’s customers “gravitated toward the previous iPhone models.” The analyst added that the sales of 2017 iPhones have been “good” so far, but they are not indicative of a so-called “super cycle.” A super cycle is a period of strong growth driven by a radical new product.
Cowen & Company estimates that Apple would sell 79 million iPhones during this holiday quarter. It is only a slight increase from 78 million iPhones sold during the December quarter of 2016. For the March quarter, the research firm predicts shipments of 56 million iPhones, which is much lower than the 61 million units sold during the March quarter of 2015. That was driven by the iPhone 6 and 6 Plus.
Ackerman’s views are similar to those of UBS Securities analyst Steven Milunovich. Milunovich said last month that 2018 would be a “solid year” for Apple because of the iPhone X, but it’s no “super cycle.” He told investors that Apple had hit the ceiling in the US market, and the only way it could grow further in the US was to increase its market share. Consumers in emerging countries like China and India have shown a preference for the iPhone 8 series and iPhone 7 series.
However, KGI Securities analyst Ming-Chi Kuo has attributed the improved delivery times to an increase in production. Kuo said the iPhone maker had resolved the manufacturing bottlenecks, and was now producing 450,000 to 550,000 iPhone X units per day. Demand for the device remains as strong as ever. The analyst said Apple would continue to improve the in-store inventories in the coming weeks.
iPhone X beats iPhone 8, 8 Plus in adoption rate
Cowen & Company’s report comes just days after data from Mixpanel showed that the iPhone X had surpassed the iPhone 8 and 8 Plus in sales. Mixpanel doesn’t reveal the actual iPhone X sales numbers. The analytics firm’s data is based on apps installed on the iPhones that use its SDK. As of Dec.11, the iPhone X adoption rate had reached 4.76%, beating the iPhone 8 Plus’s 3.59% and the iPhone 8’s 2.78%.
The adoption rate seems impressive considering the iPhone X has been around only for six weeks. The iPhone 7 and 7 Plus still dominate the market. The iPhone 7 series accounts for more than 30% of all users, according to Mixpanel. The iPhone 7 received a price cut following the launch of the iPhone 8 line, which further boosted its sales in emerging markets such as China and India. The iPhone 8 and 8 Plus have the same form factor as the iPhone 7 and 7 Plus.
Anyway, Apple is planning to bring the iPhone X’s exclusive features such as the infamous notch and Face ID to all the 2018 iPhones. According to Ming-Chi Kuo, Apple will launch a 5.8-inch OLED iPhone, a larger 6.5-inch OLED iPhone, and a 6.1-inch iPhone with LCD screens next year. All three of them will have Face ID. Earlier this week, Apple invested $390 million in Finisar to scale up the production of VCSELs that are used in the iPhone X’s TrueDepth camera to support Face ID and Animoji.
2018 iPhones to have new battery design, 7nm chips
The next year’s OLED iPhones would also have a new one-cell, L-shaped battery that would allow Apple to pack a bigger battery in the same form factor, according to Kuo. The iPhone X uses a two-cell, L-shaped 2716mAh battery. Apple is working with LG Chem on the one-cell battery design that will be used in 2018 iPhones. The next year’s 5.8-inch OLED iPhone would sport a 2900 to 3000mAh battery, which would be roughly 10% bigger than the iPhone X battery. The 6.5-inch model would pack a 3300 to 3400mAh battery.
The next year’s iPhones are also expected to have processors built on 7nm nodes. Citing supply chain sources, DigiTimes reports that Apple and Samsung are the only smartphone vendors that can afford to move from 10nm to 7nm chips next year. The Cupertino company is already working with Taiwan-based TSMC on 7nm processors that could power the 2018 iPhones and iPads.
