Demand for new flagship iPhone causes month-long shipping delays, contrasting with muted iPhone 8 sales and reportedly causing Apple concern about supply
Apple’s most expensive smartphone, the iPhone X, sold out in less than 10 minutes upon being made available for pre-order this morning.
The iPhone X – officially pronounced “10” – costs from £999 with 64GB of storage, topping out at £1149 with 256GB of storage, which is higher than the starting cost of three of Apple’s fully fledged computers.
Despite the price tag, demand is high. The company’s online shop experienced server issues in the minutes immediately following the launch of pre-orders, and the initial allocation of devices, due to arrive on 3 November, had completely sold out by 8:10am in the UK. Less than an hour later, the waiting list had extended to cover the entire first month.
The iPhone X rapidly selling out may not be entirely good news for Apple. The company has reportedly been concerned it will face severe supply constraints for the iPhone X, with a story in Nikkei Asian Review claiming its annual output was expected to be just 20m units, half of what it had initially planned. Another report, from Bloomberg, claimed that Apple was forced to remove some quality control elements from its production line in order to increase output to an acceptable level. In an unusual move, Apple specifically denied that report, saying the claim “that Apple has reduced the accuracy spec for Face ID is completely false”.
The success of the iPhone X is only one half of Apple’s concerns for the immediate future. The company is also trying to balance demand for the iPhones 8, the more conventional smartphones in its lineup for 2017. Initial reports suggest the iPhone 8 and 8 Plus experienced sluggish sales in their first few weeks on sale, by comparison to previous iPhone launches.
This time last year the iPhone 7 and 7 Plus had accounted for 43% of launch quarter sales, according to data from Consumer Intelligence Research Partners. The iPhone 8 and 8 Plus account for just 16% of all iPhone sales this quarter, however. The two-year-old iPhone 6S and iPhone 6S Plus phones sold more units, according to CIRP’s data, making up 24% of iPhone sales, while the 2016 iPhone 7 and 7 Plus phones account for 58% of sales in the quarter so far.
The figures suggest that those customers who want what is perceived to be the best iPhone available are waiting for the iPhone X, with those who are happy to settle for what is considered an inferior model deciding to save some money by buying a one- or two-year-old phone instead of the iPhone 8.
“It seems when Apple announced the the forthcoming iPhone X, it changed the market dynamic, and probably depressed demand for the iPhone 8 and 8 Plus,” said Mike Levin, co-founder of CIRP. “Rather than waiting for and buying the iPhone 8, it looks like buyers in this quarter either bought existing models, or decided to wait for iPhone X, later in the year.”