There have been all kinds of reports about Apple’s latest flagship iPhones. Just a few weeks ago, the tech giant lowered its revenue guidance for the October-December quarter due to weaker than expected demand in China. Many other reports suggested that the iPhone XR sales were far below expectations. But according to the Consumer Intelligence Research Partners (CIRP), the iPhone XR was Apple’s best-selling smartphone during the holiday quarter.
iPhone XR sales are surprisingly strong
Starting at $749, the iPhone XR was launched as a cheaper alternative to the iPhone XS and XS Max. It has only a single camera on the back, lower RAM than its more expensive siblings, and an LCD screen instead of OLED. But it’s worth the money, especially considering it runs the same A12 Bionic chip as iPhone XS and XS Max, supports Face ID technology, has cameras as good as the iPhone XS, and gets a nearly bezel-less design.
According to CIRP, the iPhone XR sales were much higher than the iPhone XS and XS Max combined in the US market. It was far from a flop as described by the media. The iPhone XR accounted for 39% of total iPhone sales during the October-December period. By comparison, the iPhone XS and XS Max together accounted for just 26%.
The research firm noted that the larger iPhone XS Max outsold the iPhone XS by “more than two-to-one ratio.” It indicates that the iPhone XS was the worst selling device of the three. From the consumers’ perspective, there was not much difference between the iPhone XS and 2017 iPhone X to trigger interest.
The XS Max’s larger screen worked in its favor as consumers prefer bigger screens to watch movies and TV shows and play games. The stronger sales of the more expensive XS Max should help offset the revenue shortfall caused by the weaker demand in China to some extent.
Apple executives have also said previously that the iPhone XR had been the top-selling iPhone every single day since its launch. CIRP co-founder Josh Lowitz said in a statement that the three new models accounted for 65% of the total iPhones sales during the holiday quarter. By comparison, the iPhone 8, 8 Plus, and iPhone X had accounted for only 61% of sales in the October-December period of 2017.
Josh Lowitz added that the iPhone XR alone “almost matched the combined iPhone 8 and 8 Plus” sales in the same period a year prior. That’s impressive considering the iPhone XR went on sale on October 26th, meaning it was available only for part of the quarter.
Rising demand for higher storage options to boost iPhone ASP
It’s worth pointing out that the CIRP surveyed only 500 US consumers who bought new iPhones between October and December 2018. So, the sample size of the survey is not large enough to reflect the broader US market. Though Apple has stopped reporting sales of individual devices, we will get a clearer picture when the company reports its quarterly results on January 29th.
The market research firm added that Apple could benefit from focusing on storage upgrade options with the future iPhones. More and more users are buying higher storage options rather than the base model. CIRP co-founder Mike Levin said Apple charges anywhere between $50 and $200 for incremental storage.
About 38% of iPhone buyers paid additional money to buy higher storage options during the Oct-Dec 2018 quarter compared to 33% in the same quarter of 2017. The rising demand for higher storage capacity iPhones could increase the iPhone’s average selling price (ASP) to above $800.
Separately, Apple said in a filing to Motherboard that it expects its brand value to increase further due to global warming. The climate change has already been driving many creatures to extinction and affecting our environment. The UK-based Carbon Disclosure Project (CDP) recently gave Apple an “A” rating based on its impact on the environment. The tech giant said as severe weather events become more frequent, consumers will come to value the iPhone’s utility in situations where necessary services such as power, transportation, and other services get temporarily interrupted.
