14 DAY TRIAL // Apple expects the iPhone X to mark the beginning of a supercycle, which is essentially an en-masse transition from older iPhone models to newer ones, a win-win migration that both users and the Cupertino-based tech company seem to need right now.
But the high price point of the iPhone X seems to drive more and more buyers to older iPhone models, with the supercycle unlikely to happen, if we are to trust the note of Wall Street analyst Karl Ackerman from Cowen & Co.
In a note to investors, Ackerman explains that sales of the iPhone X have until now been below original expectations, citing demand for previous iPhone models as living proof. While the 2017 iPhone lineup, which includes three different models (iPhone 8, iPhone 8 Plus, and iPhone X) is selling at a good pace, the existing performance is unlikely to generate a supercycle, he says.
It’s estimated that Apple would sell a total of 79 million iPhone units in the existing quarter (Q1 FY 2018), up from 78.29 million units in Q1 FY 2017, while the next-quarter performance should bring an increase from 51.2 million units to 56 million units.
iPhone X too expensive
While analyst forecasts have so far been mixed on the way the iPhone X is going to help Apple create a supercycle, Ackerman isn’t the first one to project below-expectations performance for the new model.
Count Raymond James analyst Tavis McCourt said in September this year, shortly after Apple took the wraps off the iPhone X, that the price point of the anniversary model could push more people to other models, including the iPhone 8. In the long term, however, sales of the iPhone X could improve, he projected, though it remains to be seen if demand would be so strong to generate a supercycle.
Apple is currently in the process of aligning production with demand after supply challenges, with shipping times dropping to only a couple of days in the United States. This week, Apple is expected to offer next-day delivery for the iPhone X, while in early 2018, the device should become available for walk-in customers as well.