When Apple announced it would no longer be releasing launch weekend sales totals for the iPhone, the stock price dropped. This is a key metric used by the media, and evidently Wall Street, to assess the new model’s sales potential, even though Apple is alone among tech companies to reveal such information. But such data is, for Apple, equivalent of the first weekend’s box office receipts for a movie. If the numbers aren’t huge, the movie, or the Apple gadget, will be declared a failure.
Sometimes media or industry analyst expectations are overwrought, and Apple is blamed for it. So in 2013, when iPhone launch weekend sales of the iPhone 5s, despite hitting a record, failed to match inflated analyst predictions, it was regarded as a failure. The veneer of failure followed that model until its successor arrived in 2014, even though it continued to break sales records. So it’s a situation where Apple sometimes just can’t win.
That said, Apple knows full well how many units are available to ship. It may well be that supplies will not be quite what they were last year, when 13 million units were reportedly sold, or not much more. So regardless of demand, the iPhone 7 would appear to be a failure.
It’s the no-win situation, assuming any of this is true, and there are already reports of constrained supplies. But it’s not above some tech pundits to suggest Apple deliberately holds back stock at the start of a product launch to foster the illusion of high demand. It doesn’t take much. Even though there’s the risk that some people will delay their orders, or go elsewhere and adopt — or stay with — another platform, the positive buzz may be sufficient to overcome any such negative effects.
That said, stories about possible high demand for the new iPhones has been enough to fuel a fairly large rise in Apple’s stock price. Expectations were raised by reports from Sprint and T-Mobile that preorders were as much as 400% higher than last year. That’s a surprising development, and if the trend has spread to other wireless carriers and other vendors, it could mean that Apple will be behind-the-curve keeping up with orders for quite a while.
It doesn’t hurt that Samsung had to recall the Galaxy Note 7 due to reports of exploding batteries.
Certainly Apple is only too happy to read stories indicating extremely high demand from third parties. But could it be that Sprint and T-Mobile are outliers, that demand is otherwise not so high? Verizon reported that preorders were at normal levels, but AT&T claimed a year-over-year increase without giving any specifics. That appeared to stop the stock market increase in its tracks, at least for now.
But the key may be how many units actually ship before the end of the September quarter. Those results could still demonstrate a potential resurgence in iPhone sales, if it holds true. But even if a sales dip is less than expected, it would also be reason for optimism.
It would also go against the media meme that the iPhone 7 is a minor refresh and thus doesn’t stand a chance of doing any better than the iPhone 6s. Of course, it’s not minor when some rail against Apple’s decision to ditch the headphone jack. But that might actually be a non-issue for most customers, who probably use the standard ear buds that come with an iPhone and don’t really bother with any third-party product, unless the original is damaged along the way.
Remember, too, that most people who will buy an iPhone 7 currently own an iPhone 6 or something older. To them, it’s a major improvement over what they own now. The promise of longer battery life, often on the top of customer wish lists, is itself a major development. Add to that the improved camera — and the two-camera system on the iPhone 7 Plus — and it may be regarded as a very compelling upgrade. It does appear that the enhanced camera system may boost interest in the iPhone phablet, which thus raises average sale prices. The solid state Home button might also be attractive for some people around the world who evidently fear early failure of this heavily-used feature. But it’s not that this is a known form of failure.
Most iPhone repairs probably involve replacing broken displays, and nothing about the iPhone 7 would necessarily prevent that from happening. Being water-resistant, however, would help deal with another potential source of failure.
On the other hand, if Apple manages to move more product than expected, I suppose it’s always possible that there will be some news about that development come Monday. Not that I expect it to happen, because Apple has tight control of the supply chain and information about shipments and deliveries. The final numbers are already baked into the data they had at hand when they announced that such numbers would no longer be released.
That decision also reduces pressure on Apple to have to announce record sales every single year, which is clearly impossible. This short-term results doesn’t always predict total sales. It didn’t with the iPhone 6s family, where demand dropped over time below the previous year’s totals despite the strong start.
But the prospects for the iPhone 7 may be a lot better than many expect.
| Print This Article