iPhone 11 demand stronger than expected: Ming-Chi Kuo

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Apple started taking pre-orders for its new iPhone 11 series smartphones on September 13 in the US and over a dozen other countries. TF International Securities analyst Ming-Chi Kuo had predicted earlier that the iPhone 11 demand wouldn’t be that strong because the phones would lack exciting new features. The new iPhones do lack major upgrades, but they are still flying off the shelves.

The new iPhones bring a longer battery life, a faster A13 Bionic processor, new color options, and dual or triple cameras on the back. These features alone aren’t enough to get consumers to upgrade. So, Apple adopted an aggressive pricing strategy.

The iPhone 11 – successor to iPhone XR – starts at $699 and brings a second camera on the back and better battery life. The Cupertino company is also running an aggressive trade-in program that brings down the price of a new iPhone 11 to $399 or lower depending on the value of your current iPhone. The iPhone 11 Pro starts at $999 while the Pro Max variant has a starting price of $1,099.

Trade-in program, zero-interest payments driving the iPhone 11 demand

Ming-Chi Kuo said the trade-in programs and zero-interest payment plans were driving the upgrades. Kuo’s estimates are based on Apple’s pre-order shipping estimates. The analyst said the new Midnight Green for iPhone 11 Pro models, and the Purple and Green colors for the iPhone 11 were particularly popular among pre-order customers.

The analyst added that the glass production problems for the Midnight Green iPhone 11 Pro models could lead to constrained supply over the next several weeks. Ming-Chi Kuo told investors that the more expensive iPhone 11 Pro and 11 Pro Max were popular in the United States. The cheaper iPhone 11 has been a hit in markets like China, thanks to the price cut.

The US consumers have traditionally been loyal to the high-end variants of the iPhones. But the iPhone 11 demand is also strong in the US. In China, the cheaper iPhone 11 has become an “excellent” upgrade choice for the iPhone 6 and iPhone 7 users who have been holding on to those phones for a long time.

On the back of the strong demand, TF International Securities has increased its iPhone 11 series shipment forecast for the calendar year 2019. Kuo now expects Apple to ship 70 million to 75 million new iPhones by the end of December 2019. He had previously projected shipments of 65 million to 70 million units.

However, the analyst pointed out that an escalating US-China trade war could affect the iPhone sales. The iPhones will be subjected to increased import tariffs starting December 15. Kuo told investors last month that Apple would absorb the impact of trade tariffs instead of passing it on to consumers. So, don’t expect the iPhone prices to go up when tariffs come into effect.

iPhone 11 most popular model in China

An analysis by CNBC shows that the iPhone 11 demand in China is sky-high, even though Chinese consumers have to pay a premium above the US price. Though the iPhones are made in China, they cost more in China than in the US. For instance, the iPhone 11 has been priced at 5,499 ($777) in China, which is roughly 11% premium over the US price.

That’s still an exciting deal for Chinese consumers. Last year’s iPhone XR was priced in China at 28% premium over the US price. The iPhone 11 has emerged as the most popular model in the country. Chinese e-commerce firm Fenqile told CNBC that the 128GB iPhone 11 accounted for 40% of pre-orders while the 64GB iPhone 11 grabbed 22% of the total pre-orders.

According to Apple’s China website, wait time for the iPhone 11 in 64GB and 128GB storage options extends to October 3. It means many pre-order customers won’t get the new iPhones until about two weeks after the September 20 launch. The estimated delivery dates for some color variants stretch to October 15. On the other hand, the estimated delivery date for the iPhone 11 Pro Max is September 26.

According to the rumor mill, the 2020 iPhones would be a much bigger upgrade than the iPhone 11 series. The 2020 iPhones would offer 5G connectivity, a smaller notch, and more.

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