Not good enough for Apple, analyst suggests
Sales of the $999 handset – priced at £999 in Britain – were expected to reach 30 million, said Ben Stanton, analyst at Canalys, which collated the number of Xs that found a home during the period.
“It was initially thought the pre-orders would exceed supply for Q4, so the only limiting factor would be Apple’s production process. This [largely] proved not to be the case,” he told The Register.
There are myriad reasons sales came in below the projections: the high price tag for one, but “more importantly” Apple’s five-tier iPhone strategy gave customers much more choice compared to past launches.
The SE, 6S, 7, 8 and X made the “market dynamics very different from previous years”, said Stanton.
“Having more strength lower down its portfolio is great for Apple’s total shipments, and it will almost certainly beat its record quarter for iPhone shipments. But it does pull a small proportion away from the top tier.”
Glitches with building the phone showed up too, the analyst pointed out, with Face ID proving more complex than Apple initially anticipated.
“The infrared dot projector Apple is using had never been manufactured in quantities like this before. It takes a lot of time and money to prepare production lines for complex new components like this.
“But by the end of the quarter, supply actually exceeded demand in most major markets. So this wouldn’t have been a major factor in the full-quarter shipments.”
So not a woeful start to life for the X – it should also be noted that 7 million units shipped in China. But according to Apple analyst Ming-Chi Kuo at KGI Securities, the premium handset might actually be pulled by summer ’18.
In a research note seen by AppleInsider, Kuo believed there has been a reduction in iPhone X production orders due to lower demand so the factory will “end of life” the premium handset instead of retaining it as a lower-cost option – as Apple always has done – when the next generation of the X arrives in the autumn.
In response, Stanton said: “Apple’s portfolio strategy is typically fully baked at least 18 months in advance. If Apple kills iPhone X this year, it won’t be because of low shipments. It will be a pre-planned portfolio move. Similar to when Apple ended iPhone 5 to launch iPhone 5S and iPhone 5C.” ®
