More iPhone X Sales Confusion

January 23rd, 2018

You’ve heard the stories. The iPhone X, which didn’t go on sale until early November, did surprisingly well through the rest of the year. Or maybe not. Maybe it was a poor seller, and thus Apple might have to rethink its strategy about a next generation iPhone.

Some analysts claim that the evidence from the supply chain indicates that Apple might be flush with unsold iPhone X inventory and thus cut way back in orders for the current quarter. But it’s also true that sales for a March quarter are always lower overall for Apple than a December quarter. This should be obvious, but the supply chain stories still appear every so often.

Regardless, Apple plans to announce its financial results on the afternoon of Thursday, February 1st. Until then, the best we’ll get are independent and inconsistent surveys or educated or not-so-educated guesses. So what’s the latest?

Well, there’s a report from Consumer Intelligence Research Partners, a Chicago-based firm that researches the consumer market.

The survey, released on January 22nd, covers total iPhone sales in the U.S., concluding that the iPhone 8, iPhone 8 Plus and the iPhone X delivered 61% of Apple’s smartphone sales in the December quarter. This compares to last year, where the iPhone 7 and iPhone 7 Plus received 72% of total sales.

But the two sets of numbers cover entirely different situations, since Apple had additional models available this year, dating back to the iPhone 6s and iPhone 6s Plus. So there isn’t a direct comparison. In any case, the iPhone 8 got 24% of the total, the iPhone 8 Plus got 17%, and the iPhone X got 20%.

According to Mike Levin, a partner and co-founder of CIRP, “Older models held their own. iPhone 7 and 7 Plus grabbed almost one-quarter of sales in the quarter, and the two-year old iPhone 6s and 6s Plus accounted for 8% of sales. Apple priced these older models attractively, with little visible physical difference among the 6, 7, and 8 series models. Even the older, smaller-format SE maintained a meaningful share of total sales.”

Of course, the iPhone X was on sale five fewer weeks than the other 2017 models during that quarter; they went on sale in late September. Does that mean sales totals might otherwise have exceeded the iPhone 8 had the iPhone X gone on sale earlier? That seems very probable.

It also demonstrates a preference for larger displays. Between the iPhone 8 Plus and the iPhone X, the totals reached 37% of current models. In my routine travels around the Phoenix metro area, I see larger iPhones of one sort or another more often than not. It’s not a survey, of course, but it may be that lots of people are willing to put up with the inconvenience of carrying them around in exchange for more screen real estate.

Again, the CIRP survey strictly focuses on the U.S. How the most expensive iPhone ever did elsewhere around the planet can only be estimated. Don’t expect model breakdowns from Apple. At best there will be a statement from Apple that it was pleased as punch, more or less, with the demand for the iPhone X.

But it’s significant that the costliest iPhone may have matched or exceeded the sales numbers of the cheapest model in the 2017 lineup had it been on sale longer. That is an extremely interesting development, and it only gives Apple an incentive to build even more expensive smartphones.

In fact, current chatter has it that this fall’s iPhone lineup will include an iPhone X Plus, meaning a larger model that will no doubt be at least $100 more expensive than the regular model. Compare that possibility to the way the iPhone X’s expected price freaked out Apple’s critics for so long. How could the company dare charge just shy of $1,000 for a smartphone when the Samsung Galaxy Note 8 listed for $50 less, as if that was a significant difference.

I don’t recall anyone complaining that Samsung charges prices in the range of Apple’s for competing gear. It’s all on Apple, even when you have such contradictions.

There are also rumors that Android smartphone makers are working hard to mimic Apple’s Face ID feature that includes the TrueDepth camera. Supposedly Apple is now a couple of years ahead of the competition, so after all those complaints that facial recognition would be a failure, inferior to Touch ID, that attitude has changed now that the feature has been shown to be mostly successful.

Whereas the facial recognition of the Galaxy S8 can be fooled with a digital photograph, Face ID appears to require a difficult-to-create 3D mask to bypass security. Then again, if all one wants to do is break into a single iPhone X, I suppose one might confront the user with a deadly weapon and save the time and trouble.

I’ve talked to a number of iPhone X users, all of whom say Face ID is nearly perfect in daily use. You look at it, and it works, even if you are with or without eyeglasses, and nighttime recognition also appears highly efficient. While identical twins, or parents and children who really look alike, might also fool Face ID, one hopes family members would respect one another’s privacy. Well, at least most of the time.

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