Apple's New Phones Notch Modest Start -- WSJ
December 25 2017 - 03:02AM
Dow Jones News
By Tripp Mickle
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (December 23, 2017).
Apple Inc. investors have been betting that the pricey new
iPhone X will reignite growth for the company's most important
product line.
But estimates from two market-research firms indicate customers
are buying the X and a pair of other new offerings at about the
same rate as they did with new models in the past two years --
which fell short of the iPhone's 2015 peak.
The iPhone X, iPhone 8 and iPhone 8 Plus combined for 69% of
U.S. iPhone sales for the month ended Dec. 3., with the remainder
going to older models, according to a survey of 300 iPhone buyers
by technology-analysis firm Consumer Intelligence Research
Partners.
By comparison, the iPhone 7 and 7 Plus accounted for 73% of all
iPhones sold in their first month in 2016, and the iPhone 6s and 6s
Plus accounted for 71% in their first month in 2015, the firm's
prior surveys show. Sales of those devices proved to be lackluster.
The iPhone 6 and 6 Plus -- which were big hits -- accounted for 91%
of iPhone sales in their first month in 2014.
The survey offers an early glimpse into the sales performance of
the most important new iPhone in years. Apple, which bills the
iPhone X as the future of the smartphone, gave it a sleek new
design with an edge-to-edge display and a three-dimensional camera
system that uses facial recognition to unlock the device. It also
carries a starting price of $999, half again the price of previous
models. Those factors fueled investor hopes for strong iPhone X
sales, helping propel Apple's stock over the past year.
The iPhone X, which hit stores on Nov. 3, accounted for an
estimated 30% of iPhone sales in its first month as customers opted
for lower-priced models or couldn't find it in stock, according to
Mike Levin, co-founder of Consumer Intelligence Research Partners.
Apple struggled with supply constraints for the iPhone X that
initially delayed shipment times by four to six weeks; the device
now ships within a day in the U.S.
"It's a little disappointing given the hype," Mr. Levin said.
Sales of the device also suffered, he said, because it was offered
alongside seven less-expensive iPhone models, compared with five
models last year when the company's flagship device started at
$649.
Apple declined to comment. It is expected to give the first
numbers on iPhone X sales early next year when it reports financial
results for the current quarter, which it has predicted will
deliver record-high revenue.
The iPhone 6 and 6 Plus drove a 52% surge in iPhone revenue in
Apple's fiscal 2015. Sales dropped 12% the following year, then
edged up 3.4% in the fiscal year that ended this past
September.
The iPhone X's innovations haven't resonated with some longtime
iPhone customers. Ifé Meedolson, a 27-year-old financial analyst in
London, bought one and returned it after a week, in part because he
had trouble with the facial-recognition system.
"I just felt very underwhelmed," said Mr. Meedolson, an Apple
loyalist who owns an iPad Pro, two MacBooks, an iMac and iPhone
7.
Others, like Angel Lovera in Bakersfield, Calif., have embraced
the new design. The 22-year-old likes that the display makes photos
more vibrant and shows more website content than his iPhone 6s
Plus.
"I've held a friend's iPhone 8 and been like, 'Oh my God.
Where's the rest of your screen?' " Mr. Lovera said.
As of early December, the iPhone X accounted for 4% of all
iPhone models in use globally, while the iPhone 8 and 8 Plus
accounted for 6.3%, estimates Localytics, which analyzes apps
across 2.7 billion devices and can detect which models are being
used. The combined share of 10.3% is less than the 12.5% the iPhone
7 and 7 Plus claimed at the same point in 2016.
Localytics co-founder Raj Aggarwal said the iPhone X performed
better than he expected given its premium price. "It's an awesome
start, and you haven't hit Christmas yet," he said.
Consumer interest in the iPhone X remains high in China, which
accounts for a fifth of Apple's revenue, analysts say. An RBC
Capital Markets survey in early December found 62% of 646 Chinese
respondents were interested in buying the iPhone X, more than
double the interest level it found among 4,000-plus U.S.
respondents.
JL Warren Capital, a market-research firm focused on China,
expects the region to account for a quarter of the 30 million
iPhone X units Apple is expected to ship in the quarter that ends
this month. It estimates combined shipments of all three new models
will total 51 million, down slightly from the 55.2 million iPhone 7
and 7 Plus units shipped during the same period last year.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
December 25, 2017 02:47 ET (07:47 GMT)
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