New iPhone Leak Reveals Apple's Nasty Surprise
Apple AAPL -2.37%’s best ever iPhone is coming soon. But the harsh reality for Apple is it may not come soon enough and in significant enough quantities to avert a very nasty surprise…
‘Great Secret Features’ and ‘Nasty Surprises’ are my regular columns investigating the best features / biggest problems hidden behind the headlines.
Apple's iPhone X (left) is under extreme pressure due to poor sales of the iPhone 8 and iPhone 8 Plus
According to Reuters, which also cites China's influential Economic Daily News, Apple has had to take the unprecedented decision to slash production of the iPhone 8 and iPhone 8 Plus by “nearly 50%” due to lack of demand.
A source for the Economic Daily News says this is the first time in iPhone history that production has had to be cut so soon after launch (September 22nd). In fact Apple is more used to the opposite: queues around the block and such high demand that Apple regularly says its massive sales figures are impacted simply because it cannot build enough.
The news comes following murmurs that sales of the iPhone 8 and iPhone 8 Plus have been modest but, if both Reuters and the Economic Daily News are correct, it appears Apple’s 2014-based designs are simply past their sell by date. We will learn more when Apple reports its Q4 earnings on November 2nd, though it is worth pointing out these figures are not broken down by model and new iPhones will only represent a few weeks of the overall quarter.
On the flip side Apple has previously been quick to announce record breaking weekend sales for the iPhone 5 (5 million), iPhone 5S (9 million), iPhone 6 and iPhone 6 Plus (10 million) and iPhone 6S and iPhone 6S Plus (13 million). It broke this pattern for the iPhone 7 and iPhone 7 Plus only because “initial sales will be governed by supply, not demand.” But clearly that’s not the case with the iPhone 8 and iPhone 8 Plus.
And yet it is important to note slow sales of the iPhone 8 and iPhone 8 Plus are not all doom and gloom.
Instead speculation is rife that this reduced demand hinges on customers delaying their upgrades so they can buy the radically redesigned and significantly higher priced iPhone X instead. Yes, iPhone X stock will be extremely limited at first, but as supply chain concerns ease in 2018 many are predicting Apple will belatedly break records.
Personally speaking, I don’t think poor iPhone 8 and iPhone 8 sales can be entirely pinned on the iPhone X (even with its cool party tricks) as quite frankly not everyone can afford to pay up to $1,149 (before tax) for a smartphone. I think Apple held onto the iPhone 6 and iPhone 6 Plus-originated designs a year too long, but ultimately the bounce back in 2018 should offset the impact this has on 2017 sales.
Besides the iPhone X is just the start. Based on the latest reports, Apple will build upon its changes with the new models it introduces in 2018…
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