Kuo: High preorder demand for Apple Watch Series 4, low expectations for 5.8-inch iPhone X...

Posted:
in General Discussion edited September 2018
Breaking down first weekend pre-order sales of Apple's just announced iPhone and Apple Watch products, noted analyst Ming-Chi Kuo believes current shipping estimates and launch day supply bode well for iPhone XS Max and Apple Watch Series 4. Demand for the 5.8-inch iPhone XS, however, appears to be lower than expected.

iPhone XS and iPhone XR


In a research note seen by AppleInsider, Kuo says average shipping times for Apple's flagship iPhone XS Max suggest demand for the premium handset is in line with expectations.

With launch shipments already pushed back one to two weeks, depending on model, the company's "high price strategy" appears to be paying off. Chinese demand is expectedly strong as the XS Max ticks off that demographic's most-wanted features with a new gold color option, dual-SIM support and an oversized 6.5-inch display.

Apple's new dual-SIM solution relies on eSIM technology already in use in Apple Watch and iPad, but the company is unable to market the technology in China due to carrier restrictions. Instead, Apple took the extra step of building a special model for Chinese consumers that supports two physical SIM cards, one on each side of the SIM tray.

Kuo notes average shipping times for XS Max are shorter than the two to three week ship-by dates seen during last year's iPhone X release, but believes the improvements have more to do with the supply chain than relaxed demand. As such, the analyst is forecasting XS Max to account for 25 to 30 percent of new iPhone shipments.

Demand for the 5.8-inch iPhone XS is lower than anticipated, Kuo says, pointing out most models of the iPhone X successor will deliver to customers on launch day. Considering the numbers, the analyst believes more users are interested in iPhone XS Max and iPhone XR, the latter being a new mid-tier iPhone with 6.1-inch LCD screen set to go on sale in October.

On the back "lackluster demand," Kuo decreased iPhone XS allocation estimates from 15 to 20 percent of all new iPhone model shipments down to 10 to 15 percent.

Picking up the slack is iPhone XR, which moves from 50 to 55 percent up to 55 to 60 percent of new model shipments. More affordable pricing starting at $749 in the U.S. and dual-SIM support in the Chinese market are likely to fuel demand for the aluminum clad iPhone.

"We estimate the shipment peak of XS Max and XS will be in October and XR will start shipping and benefiting supply chain momentum in October," Kuo says. "We estimate the shipments of the 2H18 new iPhone models will grow slightly year-over-year to 75 to 80 million units."

Finally, Apple Watch Series 4 is performing better than expected with Apple showing multiple model stockouts in participating launch countries. Kuo attributes increased interest to new functions like advanced heart monitoring and electrocardiogram capabilities.

Currently, Apple Watch ECG support is limited to the U.S., where the company secured FDA clearance for over-the-counter sales, and is not scheduled to roll out until later this year. During its unveiling, Apple COO Jeff Williams said the company is working to bring ECG capabilities to other countries, but failed to offer a timeline on release.

Kuo predicts Apple Watch shipments will reach 18 million units in 2018, with Series 4 accounting for 50 to 55 percent of the whole.
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Comments

  • Reply 1 of 31
    wood1208wood1208 Posts: 2,027member
    iPhone XS with lower demand is due to expected price drop for iPhone XS was $100 to $899. Mr. Kuo is right as those looking for the largesst screen iPhone with no money problem will go for MAX and rest value oriented users including family who needs multiple lines to upgrade will go for older iPhones or iPhone XR but iPhone XS with $999 is odd kid on price point.
    WhiskeyAPPLEcidernetrox
  • Reply 2 of 31
    I ordered the series 4 today.

    but I’m hoping my iPhone 7+ will last another year
    watto_cobra
  • Reply 3 of 31
    Rayz2016Rayz2016 Posts: 4,790member
    Demand for the 5.8-inch iPhone XS, however, appears to be lower than expected. 

    Ah, the age-old question: expected by whom?
    bonoboblolliverolsredgeminipajony0watto_cobra
  • Reply 4 of 31
    Same song, second verse. 
    claire1olsredgeminipaSpamSandwichwatto_cobra
  • Reply 5 of 31
    Considering the XS is physically pretty much identical to the X, wouldn’t it stand the reason it’s a lot easier for them to have ramped up production much quicker? 

    Its pretty meaningless less to look only at lead time dates without knowing the starting quantity available. 

    This is would be more meaningful if there was also a poll or some other data showing buying habits. 
    lolliversweetheart777rogifan_newredgeminipawatto_cobra
  • Reply 6 of 31
    rob53rob53 Posts: 2,105member
    Ming doesn’t have access to any actual data so he’s blowing smoke as usual. Ming makes money without having to worry about whether he’s right or wrong so I wish people would quit talking about him. 

    I have an iPhone 8plus which has about the same display size as Xs but a much smaller frame. I’d like to go back to the smaller frame size and I can without losing display size. Xmax gives me a larger display but same frame size as 8plus and I’d rather not have that frame size.
    lolliverrogifan_new
  • Reply 7 of 31
    claire1claire1 Posts: 510unconfirmed, member
    Wow this guy already knows 2018 sales numbers before these products release!!!
    sweetheart777SpamSandwich
  • Reply 8 of 31
    claire1 said:
    Wow this guy already knows 2018 sales numbers before these products release!!!
    Hahahahaha....he knows everything Apple does
    sweetheart777claire1watto_cobra
  • Reply 9 of 31
    This makes sense to me. I said earlier this week, just based on anecdotal evidence, that it seemed like almost all the pre-orders I heard about were either Watch 4 or XS Max order. I think the XR will outsell the XS too. 

    Talking about Watch 4, does anyone know good sites to sell/trade-in an Apple Watch? I have the Series 3 LTE but am really tempted by the Series 4. If I could get a decent value for my current watch, I’d def upgrade.
    watto_cobra
  • Reply 10 of 31
    Million dollar question, just how long is it going to take for the ECG to reach other counties? The most valuable feature of the product? Why should it require local authorities to decide whether to allow or not? Let’s hope it’s weeks not years we have to wait.
    watto_cobra
  • Reply 11 of 31
    Only Apple knows sales figures by model and only Apple knows what it was expecting/forecasting by model. Kuo is just guessing based on not having all the facts. I’ll throw in my own anecdote. The 256GB gold XS doesn’t ship until early October and all 5 stores near me say it will not be available on the 21st.
    supadav03claire1
  • Reply 12 of 31
    wood1208 said:
    iPhone XS with lower demand is due to expected price drop for iPhone XS was $100 to $899. Mr. Kuo is right as those looking for the largesst screen iPhone with no money problem will go for MAX and rest value oriented users including family who needs multiple lines to upgrade will go for older iPhones or iPhone XR but iPhone XS with $999 is odd kid on price point.
    Expected price drop by who? There were no credible rumors on price.
  • Reply 13 of 31
    Geez, I hope Apple will survive this.  :|
    claire1watto_cobra
  • Reply 14 of 31
    laytech said:
    Million dollar question, just how long is it going to take for the ECG to reach other counties? The most valuable feature of the product? Why should it require local authorities to decide whether to allow or not? Let’s hope it’s weeks not years we have to wait.
    Because everytime you do a medical claim, you need to be able to back it cause people will have expectation that it will work.

    Difference between a medication and a food supplement is a good example.
    watto_cobra
  • Reply 15 of 31
    Is it not embarrassing for him to be wrong yet again lowballing expectations for a product that will without a doubt turn out to be highly successful?

    I'd bet my Apple stock on it.
    SpamSandwichclaire1watto_cobra
  • Reply 16 of 31
    I suspect the delivery times might be stretched by a few days after typhoon Mangkhut slammed into Guandong province over the weekend.
    watto_cobra
  • Reply 17 of 31
    Let me the lne voice here and say M-CK makes sense.  I am disappointed by the Xs prices as a longterm AAPL investor and fanboy.  I anticipated they would be $100 less and the Xr would be $699.

    Or at least including a faster usb-c to lightning charger for the current price.

    Now I know that the camera, the A12 and faceID are absolutely killer new features but I think capturing some new market share territory would be great for AAPL longterm and not trying to goose the ASP as the primary selling point.

    However AAPL does know what they are doing and my wife waits with excitement for Xs Max Gold 512.  And I will be getting an AW series 4 at some point this year.
  • Reply 18 of 31
    Rayz2016 said:
    Demand for the 5.8-inch iPhone XS, however, appears to be lower than expected. 

    Ah, the age-old question: expected by whom?
    Some Youtubers are already forecasting lower than expected sales due to higher iPhone availability based on past online sales. They were saying things like how iPhones sold out faster online in the past than they did this year. These people will use any means they can to prove that the prices are too high, therefore showing almost no one will be buying the latest iPhones. Nearly 95% of the reviewers I've read are saying iPhone prices are simply too high, from the coming iPhone Xr to especially the fully optioned iPhone XS Max. Within a few days of sales, quite a few people have already made up their minds that iPhone sales will be quite poor this year.  Since many anti-Apple factions are hoping iPhone sales will be poor, it's a good way to get clicks.  Supposedly this year has already been claimed to be the iPhones worst sales ever due to the (extremely) high cost and lackluster upgrades (same thing said about last year's iPhone).

    So far, I've heard the reasoning if iPhone availability is high, sales will be poor and also if iPhone availability is low, iPhone sales will be poor. Sort of a lose-lose situation for Apple and Apple shareholders. I'm not prone to forecasting sales one way or another based on a couple of days of sales. All that matters to me is what Apple actually sells over the longer period. Forecasting is a waste of time and doesn't always prove accurate.
    edited September 2018
  • Reply 19 of 31
    dewmedewme Posts: 2,203member
    The iPhone Xs looks like a great upgrade for anyone who put off buying the iPhone X and still wants a large but very pocketable (but not giant) iPhone with all the bells and whistles. Keep in mind that previous generation phones that came in two sizes reserved some of the better features for the Plus model, e.g., optical image stabilization. The Xs does not sacrifice features over its jumbo sibling. This makes the Xs a compelling upgrade for pre-X owners (including droid conversions) because it does have significant performance bumps and feature enhancements, not to mention needed refinements to what was really a 1.0 product. The Xs Max on the other hand will pull in some upgraders from current iPhone X owners because of the extra screen real estate coupled with the performance bump and feature enhancements.

    Apple does know what it's doing in this department. They have created a way of formulating their new products to maximize appeal and systematically move their customer base forward and upward into newer, better, higher value, and more expensive products over time. It used to be a two year cadence on realigning the customer base largely driven by the cellular carriers' contract terms. With the greater performance, functionality, maturity, and cost of newer iPhones I fully expect customers to space out their upgrades to 3-4 years on average unless they are moving to what is basically a leasing arrangement. For me it's been almost 4 years and my "old" iPhone 6 Plus is still an excellent device that is a pleasure to use with iOS 12. I could easily stretch the 6 Plus to 5 years with its brand new battery, but a family member who's been sitting on an iPhone 4s for way too long needs some relief and the Xs Max was too irresistible to wait on. 

    The iPhone XR is a bit of an enigma in the X family. I assume it's a gateway device to bring the 6/7/8 crowd into the X fold at a somewhat lower price point, besides allowing Apple to scrape the lowest end devices like the SE from their portfolio and free up those operational resources. Apple probably didn't have enough elasticity in their bill of materials cost on the X and Xs to hit their target "entry level" iPhone price targets - so the XR was born. The XR will help accelerate the iPhone product line away from the Big Bezel Era and also gave them an easy way out of doing an iPhone 9, which would have seemed sorely regressive from day one. Add iPhone 9 to the dead-nine-pile on top of Windows 9. Samsung crawls alone in its own nine-space, which I'm sure bugs the crap out of them. 
    foregoneconclusionwatto_cobra
  • Reply 20 of 31
    Just ordered an XS to replace a 6S Plus. The screen is virtually the same size. I don't need a 'Max', and I like what I see in the XS over the XR (not that the latter is bad, mind you). I suspect a fair number of people will be like me: a formerly Plus user going to the XS because we like that screen size. And if Apple has the proportions of orders wrong a bit, they'll adjust. It's not going to be hard. So Ming is pushing something that just doesn't matter a whole lot.
    SpamSandwichwatto_cobra
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