Lack of iPhone XR delivery delays suggest softer launch demand than iPhone XS
Fewer people are rushing to buy the iPhone XR on the first day of preorders than during the iPhone XS launch, but the iPhone XR should still ultimately reign as the most popular 2018 iPhone, Loup Ventures' Gene Munster claims.
By noon Eastern time on Friday, "we were surprised to see that lead [delivery] times remained entirely unchanged except for several SKUs on T-Mobile," wrote Munster in a research note. This compares against equivalent times for the iPhone XS and iPhone XS Max, which quickly stretched out to between three and four weeks.
"As of noon ET, you can still order a[n] XR and have it delivered on October 26," the analyst noted. Munster also pointed out that the inferring demand based on delivery times slipping has some risks, as there is no way of knowing how many units Apple produced in total, or by model.
In spite of the this early data, Munster argues that the XR will become the bestselling iPhone in the next year, representing 38 percent of shipments in Apple's fiscal 2019. The phone is said to be the "greatest value" for shoppers, presumably referring to it starting at $749 -- $250 less than the XS -- while having many of the same features as its more expensive cousins, like Face ID, an edge-to-edge screen, and an A12 processor.
Loup is aiming to collect more data on October 26, when people will line up to buy an XR in-store.
"If lines are shorter than what we observed for the XS and XS Max launches in September, we will reevaluate our mix assumptions," said Munster. "Either way, this doesn't change our belief that iPhone unit growth in FY19 will be 3 percent y/y, slightly ahead of the Street's 1 percent. Separately, we continue to believe there is ASP [average selling price] upside and are modeling for $791 vs. the [Wall] Street [consensus] at $770."
The iPhone XR could potentially force ASP numbers down, but Apple may be counting on better shipments to make up the difference. Prior to the iPhone X launch in 2017, some analysts were worried about how many people would be willing to buy a $999 iPhone, but shoppers took to the device and kept ASP up.
By noon Eastern time on Friday, "we were surprised to see that lead [delivery] times remained entirely unchanged except for several SKUs on T-Mobile," wrote Munster in a research note. This compares against equivalent times for the iPhone XS and iPhone XS Max, which quickly stretched out to between three and four weeks.
"As of noon ET, you can still order a[n] XR and have it delivered on October 26," the analyst noted. Munster also pointed out that the inferring demand based on delivery times slipping has some risks, as there is no way of knowing how many units Apple produced in total, or by model.
In spite of the this early data, Munster argues that the XR will become the bestselling iPhone in the next year, representing 38 percent of shipments in Apple's fiscal 2019. The phone is said to be the "greatest value" for shoppers, presumably referring to it starting at $749 -- $250 less than the XS -- while having many of the same features as its more expensive cousins, like Face ID, an edge-to-edge screen, and an A12 processor.
Loup is aiming to collect more data on October 26, when people will line up to buy an XR in-store.
"If lines are shorter than what we observed for the XS and XS Max launches in September, we will reevaluate our mix assumptions," said Munster. "Either way, this doesn't change our belief that iPhone unit growth in FY19 will be 3 percent y/y, slightly ahead of the Street's 1 percent. Separately, we continue to believe there is ASP [average selling price] upside and are modeling for $791 vs. the [Wall] Street [consensus] at $770."
The iPhone XR could potentially force ASP numbers down, but Apple may be counting on better shipments to make up the difference. Prior to the iPhone X launch in 2017, some analysts were worried about how many people would be willing to buy a $999 iPhone, but shoppers took to the device and kept ASP up.
Comments
Of course how much they could actually produce for the initial roll out is more interesting and that's unknown.
If the first shipments were on the low side high availability might be indicative of something.
It's worth noting that even the 'affordable' Xr is basically a 1,000€ phone in the EU. That's a lot of money and with Black Friday on the horizon people might be holding off a bit, especially if the purchase is a possible Xmas gift.
I was back in the market for an X model until prices were announced. It's now a no go for us.
Not this again?!?!?
Perhaps Apple made many more Xr's, than Xs or Xs Max?
Perhaps?
But it I do agree with Munster that it’s “a XR” not “an XR.” An-ten-R-gate!
To clarify the other colours are just not available for pre-order. Black and white are the only options. Is this bc of supply issues or demand issues? Know one knows.
How? Yes, I read the link but it makes zero sense to me. It suggests the XR pulls sales away from the higher priced XS, but the base XR is more expensive than the 8 was last year. If you figure most people are buying XR/XS this year in numbers comparable to 8/X last year, the ASP would go way up. I know it’s not an apples to apples comparison but I don’t see the logic here. To me, it looks like one of Tim’s famous “nice problems to have”.
This is a perfect example of why people make fun of analysts, and why they don't deserve whatever they're being paid. It won't be the end of this quarter, but Munster is bound to get proven wrong (as usual) yet again during some future results call.
Yes, Apple harvested the can't-wait, can-afford crowd for the XS Max -- bu those people weren't going to buy the XR anyway. The XR hits the sweet spot for anyone who isn't under subsidies anymore, and is a real improvement in both size and features to the iPhone X, which normally would be the second best-selling iPhone now as last year's now-discounted model.
I wish there were some published guidelines on how incompetent you have to be at your job before you get fired as a tech sector analyst, because I'm pretty sure Rob Enderle and Gene Munster would be panhandlers today if there were such guidelines.
Wait - marketing actually got their numbers right, so they ordered the right number of phones ahead of time. Everything's OK!
Or maybe, the LCDs are easier to make and less supply constrained than the OLED displays for the Xs.
No - it's the fact that people ordering the Xs are the ones who have to have the latest and best whereas the Xr crowd is willing to wait a bit and see the reviews first before ordering.
Or maybe, some analyst just needs to get a report out before he buys/sells his stock...
Apple's iPhone XR will be one of the top most successful smartphone designs created and sold in 2018.