iPhone X price premium fears overblown, strong demand continues in U.S., China

AppleInsider

New data collected from prospective iPhone buyers in China by an investment analyst suggests that demand for the 256GB iPhone X remains outstanding -- which will lead to a massive quarter for Apple.

Amit Daryanani from RBC Capital Markets compiled a detailed consumer survey in China. Of the respondents, 62 percent of the respondents were interested in buying the high-end iPhone X, versus 28 percent in the company's U.S. survey.

Additionally, the higher capacities for all iPhones were preferred, with 66 percent of the potential iPhone X buyers looking at the 256GB model. Additionally, 64 percent of the iPhone 8 family purchasers, and 75 percent of iPhone 7 buyers were looking at the highest storage capacities.

Daryanani believes that there will be a "stronger than anticipated mix shift" in the Chinese market, despite early concerns about the iPhone X price premium, Additionally, the quest for more storage will drive up average selling price for the device, possibly more than Wall Street's previous expectation.

In the U.S. market, Daryanani is still seeing strong demand for the iPhone X. As such, reports about wait times decreasing are seen to be more supply catching up with the very strong demand for the device, and less about any softening in demand for the phone.

Apple is predicting a blockbuster quarter. During Apple's last earnings conference call, Apple predicted between $84 billion and $87 billion in revenue, with gross margins between 38 percent and 38.5 percent.

For comparison, in the first fiscal quarter of 2017, Apple generated $78.4 billion in revenue. In the 2015 holiday quarter following the iPhone 6s release, Apple generated $75.9 billion. Apple cranked out $74.6 billion in the previous year that saw the large-screen iPhone 6 family launch.

johnenglish

Huh, it's almost like Apple knows what they're doing and the armchair CEOs don't.

lkrupp

So can we please, finally, start just laughing at the naysayers instead of trying to respond to them? I completely remember the cacophony surrounding the introduction of the iPhone X. Apple had crossed the line, Apple had jumped the shark, no one was going to pay $1K for a phone, the notch would kill sales left and right, the drum beating went on and on. They say the same things over and over again and they are always shown to be wrong.

Now comes the iMac Pro and those same critics are trashing it too. It’s not really a Pro machine because you can’t open it up and fiddle around inside, as if real professionals with deadlines have time to do that anyway. No one is going to buy it either, right? I can just imagine what will be said when the new Mac Pro is introduced next year. It will be more of the same from that crowd. And god forbid a new Mac mini is released next year. They will jump on  that like flies on a bull's balls.

I think the naysayers and trolls have jumped the shark as they haven’t had anything new to say about Apple for years now. You can only predict failure so long until people start laughing at you. I put this crowd right up there with the deranged, self-taught theologians who regularly predict the end of the world and the coming of the Rapture. Next time, next time they’ll be right. No really, next time.

trashman69

I still see 90+ billion this quarter.  

78Bandit

Poll question:  Which would you be interested in, a Ferrari or a Kia?  If you are interested in a Ferrari do you want the California or the La Ferrari?  Such polls are meaningless as they don't accurately reflect actual purchases.

I have no doubt Apple will have a stellar quarter with revenues likely at the high end of their estimates.  There certainly was a large market built up for a premium phone since Apple hadn't significantly redesigned the phone since 2014.  The key will be the quarterly estimates for January-March.  Wait times on the iPhone X are near zero in some of the major markets.  Is this because of increased supply or satiated demand?  If Apple doesn't forecast a similar percentage growth in same-quarter revenues and unit sales than the Jan-Mar quarter in 2015 then I think it will be a strong indication they have hit a plateau and are depending on increases in average selling price to drive revenue growth as opposed to increased market share.

Apple needs to get out of the 225 million units sold rut it has been in for the past three years.  Prior to the 6 they saw regular double-digit market share increases, now it is basically flat.  The iPhone X is going to need to sell a whole lot of units in the 2nd and 3rd quarters, and I've got my serious doubts there are a lot of buyers at this point for a $1,000+ phone that are still waiting this year.

It will be very interesting to see what Apple themselves predict for the next quarter.  I don't think many of these analysts have any better information than the armchair CEOs on the message boards.

ksec

I would love to be proven wrong, because from what I can tell iPhone X is no where near what the black market anticipation were in China. Basically they were expecting another iPhone 4 / 6 Plus volume, but it is definitely not anywhere close. iPhone 7 is doing surprisingly well though.  Really cant wait to see those results.

gmgravytrain

I'd sure like to find out who the people are who always start the negative sales rumors for Apple long before the product is even available to the public. It's as though someone takes their own opinion about the price or low demand and then spreads that opinion around as though it were a fact. There's no way one person can think that their personal opinion counts for everyone else's opinion.

When it comes to Amazon, it's always a positive slant on how great the product is and how it will sell in the millions. With Apple, it's always the opposite. The AirPods were said to become a huge sales failure due to how ugly they were when put in people's ears. Anyone who spoke about iPhone X usually started with how it was TOO expensive for anyone to buy and that Apple was crazy for selling a $1000 smartphone.  I know the HomePod will be claimed to be a huge failure because of how expensive it is (The Google Home Max costs more) and how stupid Siri is.  Yes, everyone knows Apple is already too late to the virtual assistant party.  Forget AppleWatch.  NO ONE is going to pay for an overpriced AppleWatch when they can buy a Fitbit or Android Wear smartwatch for half of what Apple is charging for AppleWatch.  Instant FAIL.

Anyway, from what I've read, it's Samsung having the problems moving their flagship smartphones as they have been cutting prices and offering rebates and freebies to move stagnant inventory. I'm really not sure why there are so many people who feel Apple doesn't know how to run a successful business after all these years. Is it stupidity or just stubbornness? Maybe just blind hate for a successful company? Why should the haters waste their time spreading lies? They should just keep their mouths closed and silently buy some non-Apple product which would be a far more practical way of protesting against Apple.

rogifan_new

Of course. And this is why Apple doesn’t offer the sweet spot. So long as they know they can keep upselling people they never will.

avon b7

johnenglish said:

Huh, it's almost like Apple knows what they're doing and the armchair CEOs don't.

Depends on which armchair CEOs you read.

Apple has made possibly its most radical mobile strategic shift ever with the release of the 2017 iPhones.

The armchair CEOs that said that would never happen (mostly those who blindly defend Apple, whatever it does) clearly got that one wrong.

The presence of a 1,000 dollar phone in that context means very little. Even Huawei had 1,400 dollar phones (all sold out) a while before Apple.

The big risk for Apple (not for competitors) was if leaving a large spread of lower priced phones would eat into the top end.

You won't see any answer to that question until after the Christmas quarter.

Rayz2016

avon b7 said:

johnenglish said:

Huh, it's almost like Apple knows what they're doing and the armchair CEOs don't.

Depends on which armchair CEOs you read.

Apple has made possibly its most radical mobile strategic shift ever with the release of the 2017 iPhones.

The armchair CEOs that said that would never happen (mostly those who blindly defend Apple, whatever it does) clearly got that one wrong.

The presence of a 1,000 dollar phone in that context means very little. Even Huawei had 1,400 dollar phones (all sold out) a while before Apple.

The big risk for Apple (not for competitors) was if leaving a large spread of lower priced phones would eat into the top end.

You won't see any answer to that question until after the Christmas quarter.

What radical shift was that?

matrix077

avon b7 said:

Even Huawei had 1,400 dollar phones (all sold out) a while before Apple.

You mean this one?

The Porsche Design Huawei Mate 10 is a comical cash grab

I was skeptical of last year’s Porsche Design Mate 9, but even that device managed to stand out by offering a curved display, a notably different design, a front-facing finger scanner, a higher resolution display, and additional internal storage and RAM. Nothing life-changing to be sure, and certainly not worth its price tag, but it was still enough to differentiate itself from the standard Mate 9.
Not so with the Porsche Design Mate 10.
The Porsche Design Mate 10 takes the Mate 10 Pro, changes the pattern on the camera from horizontal to vertical, bumps the internal storage to 256 GB and that’s about it. Oh, you get wallpapers, and, umm, a Porsche Design theme. Because themes are really hard to come by and, of course, très expensive. It’s black too; a real rarity in smartphones these days.

Well.. sincerely thank you for making me feel much much better about my X price lol.

Soli

lkrupp said:

So can we please, finally, start just laughing at the naysayers instead of trying to respond to them? I completely remember the cacophony surrounding the introduction of the iPhone X. Apple had crossed the line, Apple had jumped the shark, no one was going to pay $1K for a phone, the notch would kill sales left and right, the drum beating went on and on. They say the same things over and over again and they are always shown to be wrong.

Now comes the iMac Pro and those same critics are trashing it too. It’s not really a Pro machine because you can’t open it up and fiddle around inside, as if real professionals with deadlines have time to do that anyway. No one is going to buy it either, right? I can just imagine what will be said when the new Mac Pro is introduced next year. It will be more of the same from that crowd. And god forbid a new Mac mini is released next year. They will jump on  that like flies on a bull's balls.

I think the naysayers and trolls have jumped the shark as they haven’t had anything new to say about Apple for years now. You can only predict failure so long until people start laughing at you. I put this crowd right up there with the deranged, self-taught theologians who regularly predict the end of the world and the coming of the Rapture. Next time, next time they’ll be right. No really, next time.

Those people sounded like Balmer (and a million other anti-Apple people) when the original iPhone was introduced.

Soli

avon b7 said:
Even Huawei had 1,400 dollar phones (all sold out) a while before Apple.

I think this time you're purposely missing the point. You know damn well the "sold out" is interconnected to quantity, which is why we don't talk about the Mona Lisa being sold out despite it is since the only one isn't for sale. Hoow many units did Huawei produce? What's the percentage compared to mass produced, at least at several millions per month, iPhone X?

gmgravytrain

johnenglish said:

Huh, it's almost like Apple knows what they're doing and the armchair CEOs don't.

I've always wondered why armchair CEOs don't use their information to turn around struggling companies. Why focus on the company with the most money and say if they ran that company it could make a whole lot more money? Why not try to give their genius plans to a company like Sears or J.C. Penney to keep them in business. Armchair CEOs always think they need to help Apple when the company doesn't appear to be struggling at all. There must be dozens of companies in dire positions that could use the help of a genius armchair CEO. I always thought it was quite difficult to run a highly profitable company year after year but Apple seems to manage to do so. It's still on the doomed company list but I guess nothing will change that.

lkrupp

78Bandit said:

Poll question:  Which would you be interested in, a Ferrari or a Kia?  If you are interested in a Ferrari do you want the California or the La Ferrari?  Such polls are meaningless as they don't accurately reflect actual purchases.

  

lkrupp

ksec said:

I would love to be proven wrong, because from what I can tell iPhone X is no where near what the black market anticipation were in China. Basically they were expecting another iPhone 4 / 6 Plus volume, but it is definitely not anywhere close. iPhone 7 is doing surprisingly well though.  Really cant wait to see those results.

  

lkrupp

gmgravytrain said:

I'm really not sure why there are so many people who feel Apple doesn't know how to run a successful business after all these years. Is it stupidity or just stubbornness? Maybe just blind hate for a successful company? Why should the haters waste their time spreading lies? They should just keep their mouths closed and silently buy some non-Apple product which would be a far more practical way of protesting against Apple.

All of the above.

macxpress

rogifan_new said:

Of course. And this is why Apple doesn’t offer the sweet spot. So long as they know they can keep upselling people they never will.

This so called sweet spot is a moving target for Apple. What may be the sweet spot for you or someone else, may not be for me or someone else. 

Soli

macxpress said:

rogifan_new said:

Of course. And this is why Apple doesn’t offer the sweet spot. So long as they know they can keep upselling people they never will.

This so called sweet spot is a moving target for Apple. What may be the sweet spot for you or someone else, may not be for me or someone else. 

If Apple is missing "the sweet spot" it's from selling their iPhones (and other products) for too low a price, not too high, as noted by demand outstripping supply for an atypically long time despite massive production.

macxpress

Why is it that every time Apple releases something its automatically a failure, or not as big as they (or Apple) expects? Yet in the end, its almost always well were wrong and Apple blew away expectations. I think this has to stop...Someone is probably gaining from this financially. 

I always just blow these articles off...I'll wait for Apple to report the official numbers, not what someone got from suppliers and all of this other BS crap they come up with which we know isn't accurate at all. It never has been yet they always rely on it. 

Rayz2016

Soli said:

macxpress said:

rogifan_new said:

Of course. And this is why Apple doesn’t offer the sweet spot. So long as they know they can keep upselling people they never will.

This so called sweet spot is a moving target for Apple. What may be the sweet spot for you or someone else, may not be for me or someone else. 

If Apple is missing "the sweet spot" it's from selling their iPhones (and other products) for too low a price, not too high, as noted by demand outstripping supply for an atypically long time despite massive production.

You’re trying to explain basic economic theory to people who have a pathological need not to understand it.