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  • iPhone 7 Sales — The Great Unknown?

    September 30th, 2016

    As September winds down, no doubt some of you are wondering just how well the iPhone 7 is faring so far. What is known is that Apple claims sellouts, particularly with the iPhone 7 Plus, which appears to be more popular than some expected. Evidently that dual-camera system is a reason for spend $100 more to get one.

    All this augers well for the average sale price of an iPhone, but it doesn’t tell us how many sales Apple will report. It’s still all about many units Apple has actually delivered to customers, as opposed to how many have been ordered. The two do not yet match, although Apple obviously hasn’t revealed how close they are or, as yet, when they expect demand to catch up with supplies.

    Now some suggest the great conspiracy, in which Apple deliberately produces a little less at the beginning of a production cycle to inflate the popularity of a product. But too much of that can have unintended consequences, such as some people deciding they can wait. Or if they planned on switching from, say, a Samsung, that maybe they’ll do it on a future product cycle. So I assume that, for the most part, when Apple reports that supplies are constrained, it’s a consequence of higher demand and the normal delays in improving production, especially if a lot of new components are involved.

    So the first customers of the new iPhones received them on September 16. Even then it was reported to be near impossible to get an iPhone 7 Plus. It may be that Apple hoped that a somewhat earlier shipping date would allow them to move more product in the final days of the September quarter. Perhaps that’s true, but if supplies are still severely constrained, it may not matter so much.

    What’s more, there are still no hard numbers as to how well they did. Apple indicated it would no longer release launch weekend sales figures, claiming that tight supplies made it impossible to convey an accurate picture of the actual demand. But that’s probably true most years for iPhones. It’s the same story, that more could be sold if more units were ready to ship. But if the number of units produced this year were the same or less than last year, it would only look worse for Apple, which may be the real reason cynics like me believe the decision not to reveal those numbers was made.

    Still, if you want the iPhone 7 of your choice today, prepare to wait. The iPhone 7 Plus is still hard to get, and Jet Black versions of both may be backordered for weeks. But don’t forget the shiny black means prone to scratches, so one is best advised to stick it in a case. That may hide its great looks, but there are tradeoffs I suppose. Still, when Apple releases its quarterly financials in late October, the iPhone sales figures will be checked carefully.

    If they are down from last year, which is in keeping with Apple’s conservative guidance for the September quarter, it will probably mean that the new iPhone didn’t ship in enough quantities to make much a difference. If the numbers are higher, or reveal a sales increase, then the prospects for the iPhone 7 may be even better than many expect.

    As it is, however, if you want one, the watchword is to just be patient and wait.

    Meantime, it’s very possible Samsung’s current situation may help Apple earn even higher sales. The Galaxy Note 7 phablet was recalled on September 2nd due to many reports of overheating and fires as the result of a defective battery. I still believe that problem didn’t get all the publicity that it deserved, but it surely put a damper on sales prospects. Even though you can buy one now that’s supposedly free of the battery issues, I suspect potential customers might be gun shy. Would they take it on faith that Samsung resolved the problem? I’d assume they might based 0n the fact that Samsung usually makes reliable gear, and this was just one of those unfortunate production errors that probably won’t recur.

    But why was it allowed to happen in the first place?

    According to published reports, Samsung rushed the Galaxy Note 7 to production to arrive ahead of the iPhone 7 to get a leg up on sales. Or maybe they were lured in by speculation that the new iPhone would be, at best, a very modest upgrade that wouldn’t be so popular, and this was an ideal time to gain more sales at Apple’s expense.

    That said, Samsung is a responsible company, and no doubt will try harder not to make such a foolish mistake in the future. On the other hand, the negative publicity may suppress sales for a while, giving Apple perhaps a further advantage. Well, if we’re talking of new customers or converts who finally decided to make the jump to iPhone.

    In the meantime, with all the negative publicity about declining iPhone sales, it doesn’t hurt to see Apple fighting to build enough gear to meet demand.



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    2 Responses to “iPhone 7 Sales — The Great Unknown?”

    1. Paul Robinson says:

      Good column as always!

      Surprised, though, you didn’t mention the 2nd round of battery issues with the Samsung– or, the exploding washing machines! There is something amiss with their designs, product testing, or quality control checks.

      Finally, a side note. Why does your web page come up in such a small font size and run right to the edge of the web page window? (This is on an iPad.) It looks aesthetically poor and really makes it hard to read.

      Of course, we can immediately invoke Reader mode, which we do, but the basic web page should be a lot closer to that to begin with!

      • gene says:

        I merely referred to what was obviously the worst problem, not on Samsung’s reliability history.

        As to the font size, if you’re referring to the mobile version, we’re using a WordPress Plugin. I’m not enamored with any of the choices, and hope to work with a developer to produce something more acceptable.

        Peace,
        Gene

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