So Maybe, Just Maybe, the iPhone 8 is Doing Well
September 28th, 2017You can’t possibly imagine the potential tragedy. With great fanfare, Apple introduces two new lines of iPhones. The first, the iPhone 8, is essentially an iterative update to the iPhone 7 with a glass backing and the usual faster parts. You almost think that, from here on, Apple has given up the “s” label for iPhone updates, and gone with full version numbers.
So maybe there will be an iPhone 9 next year? And will the iPhone X become iPhone X Series 2?
Regardless, Apple watchers paid close attention this past weekend for some evidence, any evidence, as to how sales may have fared. Last year, Apple didn’t report first weekend sales for the iPhone 7, and they followed suit this year. But the long lines that would normally snake around an Apple Store weren’t so long this time. You can get most any configuration you want within 1-3 business days from Apple’s site, and I’ll assume most dealers are able to fill demand without undue delays.
So what’s going on here? Did Apple misjudge demand and flood the channel, or was it just the proper combination of having enough supplies to serve customer needs? After all, Macs are doing pretty well, and recent model refreshes didn’t produce big backlogs.
But the horror stories have begun in earnest. Sales of the iPhone 8 are poor, as customers wait for the iPhone X, or maybe they’re all buying Samsungs or waiting for the results of Google’s acquisition of 2,000 staffers from HTC to develop new stuff.
There may be some clues later this month when Apple announces its September quarter financials, assuming there were enough sales of new gear to really flesh out the quarter. One expects that sales dropped ahead of the new model intros. After all, even if you really didn’t crave something all new, you can buy a legacy model for less once new gear is introduced. All good.
Well, one prominent industry analyst suggests that iPhone 8 sales are not slow at all. According to KGI analyst Ming-Chi Kuo, iPhone 8 sales were in line with Apple’s expectations, whatever they were. The numbers are expected to build substantially once the iPhone X arrives. Of course, there are still reports that Apple is having big problems ramping up production, so it may well be that it’ll be hard to get one for a while.
Kuo writes, “While we acknowledge that queues outside SIM-free channels have been much shorter than after previous iPhone launches, we see stable first-weekend demand for the iPhone 8/8 Plus in carrier channels, most of those camping outside unlocked-device outlets are presumably hardcore Apple fans and heavy users, whose plan this year is to gear up for the iPhone X.”
In short, the people who are the most devoted to the latest and greatest gear from Apple are the ones most apt to show up at the stores to buy them as soon as they go on sale. But it’s iPhone X envy that kept some of them away.
I have to tell you that I used to do that too until I realized it was really foolish to waste my time, unless I had to meet a publishing deadline. Might as well order new iPhones online, and wait for it to show up at my front door, even if it took a week or two to get there. You can call me lazy, but I suspect most people would prefer to simplify their lives, and they will buy new gadgets in the way that’s most convenient to them. Sure, they might visit an Apple Store, but after they know stocks are plentiful and that people aren’t stacked out outside. Or they will visit another dealer, maybe the local Walmart or Best Buy, to buy an iPhone.
No rush.
I realize the Apple critics are going to claim that iPhone sales must be depressed because only one of two new models is available, not wanted to recognize the possibility that sales might catch up and then some when the high-profile model ships. Then total sales will be a matter of how many copies of the iPhone X Apple can move into the channel, and that has been a huge question mark.
There have been constant reports for weeks that there will be production delays, even before the iPhone X was expected to be in production. It has to be hard with all the new changes. What about the parts for Face ID and other new components? How can Apple possibly build enough of these things?
As most of you know, the iPhone X will be available November 3rd. Will Apple be able to meet demand? Just how many people want to buy a $999 iPhone? Well, don’t forget that a large number of sales will be made via credit cards or lease/purchase deals. Over a 24-month period, the price per month won’t be that much higher than an iPhone 8 Plus, and the 64GB iPhone X is only a slightly more expensive than a Samsung Galaxy Note 8.
So if sales are not quite what was expected, some will blame the high price, assuming production quantities were sufficient. If sales beat expectations, it’ll be the result of Apple’s reality distortion field, or a bunch of fanatics who are only to happy to pay whatever Apple demands for its luxury smartphones. Or something like that.
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See what I have already written in response to an earlier piece: Apple has adopted a new marketing strategy that makes it a lot easier and quicker to order online. This probably has had the effect (and was probably intended to do so) of disincentivising purchases at Apple Stores. So, yes, Store sales are way down. But it is very possible that online sales have gone up more or less proportionately. So (with the exception of that section of the press with a pathological antipathy towards Apple) we should all refrain from pontificating about total iPhone 8 sales until the results are officially announced.
By the way, I do think the iPhone 8 has one serious shortcoming, for which Apple deserves to get dinged: the fact that its storage jumps from 64 gb. straignt to 256 gb. This is a lot like Army shoes: the iPhone now only comes in two sizes, Too Big and Too Small. For a lot of us, self included, 128 gb. would have been the sweet spot. I don’t understand why Apple wouldn’t let us have it.