By this point in the life cycle of the iPhone X, many analysts were convinced Apple would be in a ‘super cycle’ of increased sales, users demanding an upgrade to the latest smartphone, and a rush of interest in the tenth-anniversary handset. Instead sales of the current iPhone family are lagging behind that of the iPhone 7 and iPhone 7 Plus at the same point in their respective lives (reports The Register).
No doubt Apple was expecting this news. I suspect that Tim Cook and his team will be delighted that the iPhone family has weathered an awkward Q4 in terms of sales, supply, and stock levels. Sales may not be off the charts, but it's far from a failure.
I’ve a pretty good idea why there is no evidence of an iPhone super-cycle kicking off in Q4 2017… simply put there was not enough stock of the iPhone X to make an appreciable difference in sales figures; and the general public were, in most cases, not ready to consider the iPhone 8 instead of the iPhone X. Moments after it was available to pre-order, the iPhone X reached a six-week ordering delay. That has now been whittled down and next-day delivery is available in the US, the UK, and the majority of Western markets.
This was always going to be the likely result of Apple’s choice. By launching the iPhone 8, 8 Plus, and X, all at the same time Tim Cook and his team were being as honest as possible with the market. They know the iPhone 8 family would launch immediate and the iPhone X would follow a month later. And maybe the iPhone 8 sales would be a surprising success.
To the surprise of nobody who understands the Osborne Effect, those looking for the best phone possible waited for the iPhone X. That would have depressed sales of the iPhone family as a whole during the critical quarter leading up to Christmas, even if the iPhone X had been available in sufficient numbers.
Apple is playing the long game here. Yes Q4 is going to be lower in terms of sales, and that’s going to bring some short-term PR pain in January on the earnings call (and another year of falling Q4 sales). But the pain here is not the lack of people wanting to buy a new iPhone, it’s the lack of new iPhones for people who want to buy one.
Tim Cook took the gamble of a quick hit of bad news, balanced against rising sales in the three remaining quarters of the iPhone X life space. The first part has been weathered, now Apple will want to see the return kicking in. The improved availability of the iPhone X too late to make a difference to the end of 2017 but watch the year on year iPhone X sales in the first half of 2018. If Tim Cook is right, that’s where we’ll see the first signs of the super-cycle.
Now read how we covered Tim Cook’s iPhone X gamble earlier this year…
