iPhone X Sales To Drive Smartphone Industry Growth In 2018: Gartner

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The much-awaited iPhone X is set to go on sale in a couple of weeks. Everyone who has been keeping an eye on the supply chain rumors knows that the 10th-anniversary iPhone will be in short supply through the holiday season due to limited production. It means most buyers will have to wait until early 2018 for the phone. But limited iPhone X sales during the holiday quarter will actually be good news for the smartphone industry in 2018, according to a market research firm.

iPhone X sales to remain strong going into 2018

Global smartphone sales have been declining since 2015. Research firm Gartner predicts the smartphone industry would see a 2% growth in 2018, all thanks to the strong iPhone X sales. Handset makers are estimated to ship 1.92 billion units in 2018. Gartner said the iPhone X would drive sales in key markets such as North America, Western Europe, and China. These estimates are based on a survey of 16,537 people in the US, UK, China, Germany, and India.

Apple will launch its most expensive smartphone on November 3. Most iPhone users looking to upgrade this year are holding out for the iPhone X, which has significantly affected the iPhone 8 and 8 Plus sales. Since the iPhone X is arriving later than usual, and will be in short supply upon launch, Gartner predicts a strong iPhone X sales momentum going into 2018.

iPhone X Sales
Image Source: Gartner.com (screenshot)

Gartner research director Roberta Cozza added that smartphones would account for 86% of total mobile phone shipments next year compared to 80% in 2017. The iPhone X represents the biggest upgrade in Apple’s smartphone lineup in years. It sports a 5.8-inch bezel-less OLED display, an A11 Bionic processor, wireless charging, dual camera system, augmented reality, animoji, and FaceID facial recognition system for security.

Supply shortage could hurt the iPhone X sales

The iPhone X has been facing production issues. At the heart of the problem is the 3D infrared sensor that enables FaceID. Yield rates for the 3D sensing modules are still far below satisfactory levels, limiting the number of iPhone X units Foxconn could assemble. The supply has been improving now. A recent report suggested that Foxconn has increased the iPhone X output from 100,000 units per week previously to 400,000 units a week now.

DigiTimes reported earlier this week that Apple has shipped the first batch of the iPhone X from China to the United Arab Emirates and the Netherlands. The initial batch consisted of only 46,500 units, which is much lower than the first batch of the previous iPhones. Foxconn is expected to further increase the production in the coming weeks.

KGI Securities expects the iPhone X demand to be sky high despite its $1,000 starting price. The phone could receive about 50 million pre-orders, but Apple would be able to fulfill only 30-35 million of them by the end of this year. The rest of the pre-orders, along with the orders placed after the device goes on sale, would be fulfilled in the first quarter of 2018. Analysts believe the iPhone X would trigger a super-cycle that would last until the second or third quarter of 2018.

The iPhone X pre-orders would open at 12:01 a.m. Pacific Time (3:01 a.m. ET) on October 27. If you want to get the device during the holiday period, you have to be among the first to pre-order. Set the alarm, choose the storage and color options in advance, and use the Apple Store iOS app to pre-order the iPhone X. Also, decide the mode of payment and keep your address and other details ready before pre-orders go live.

PC sales to decline 4.4% in 2018

Gartner added that the combined shipments of PCs, tablets, and smartphones will reach 2.35 billion units in 2018, showing an annual growth of roughly 2%. However, the growth will largely be driven by smartphones. The PC sales are estimated to decline 4.4% YoY. Gartner research director Ranjit Atwal said consumers still depend as much on PCs or tablets as they do on smartphones.

Consumers are replacing their smartphones frequently, and holding on to their PCs for longer. Business PC sales will see a growth by the end of this year due to the faster Windows 10 replacement in most markets. Windows 10 replacements have kept the PC market stable in 2017.

Apple addresses Senator’s concerns about FaceID

Separately, Apple has responded to Senator Al Franken to address his queries about FaceID. When Apple unveiled the iPhone X, the Minnesota Democrat raised ten questions about user privacy and security in an open letter to Apple’s chief executive Tim Cook. The tech giant had already addressed most of the queries in a white paper on FaceID.

Apple said the user’s “faceprints” are stored on the device itself. They are not collected by Apple, and neither can third-party developers collect the face data. The FaceID technology was built to work with a diverse type of faces, genders, races, and skin tones. The face data is stored within the encrypted Secure Enclave of the phone, and it never leaves the device.

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