Kuo: Apple Watch Series 3 Demand Higher Than Expected as iPhone X Anticipation Cannibalizes iPhone 8 Pre-Orders

[MacRumors]

Demand for Apple's high-end flagship iPhone X is "very likely" to cannibalize iPhone 8 pre-orders, predicts KGI Securities analyst Ming-Chi Kuo in a note sent out to investors this morning.

iPhone pre-orders traditionally sell out in September due to high demand, but this year, many models of the iPhone 8 and the iPhone 8 Plus were available for launch day delivery through the weekend, and continue to remain readily available for launch day pickup in Apple retail stores.

Kuo, like many of us, believes this is because many customers are awaiting the iPhone X. KGI is "positive on demand" for iPhone X and believes the market will be conservative on iPhone 8 and its suppliers in the near term. High demand for iPhone X, which does not launch until November, could impact Apple's fourth-quarter earnings results.

Historically, it takes 3-6 weeks or more to ship new iPhone models after they are available for preorder, due to initial tight supply and robust demand. However, our latest review indicates it will take less than 1-2 weeks for the iPhone 8. We believe this is because there is a strong likelihood that iPhone X demand will cannibalize iPhone 8 pre-orders

As for the Apple Watch Series 3, Kuo says demand for the LTE version of the device was "significantly stronger" than expected, perhaps due to the "low premium of $70" over the non-LTE version of the watch.

He believes pre-order weighting of the GPS + Cellular version of the Apple Watch to be 80 to 90 percent over the non-LTE version, though that prediction does seem somewhat questionable given the limited number of countries where the LTE version of the device was available for purchase.

Before the media event, we forecasted the production weighting of the GPS + Cellular version would be 30-40%. However, the pre-order website shows shipments of this version are taking much longer than those of the GPS version (3-4 weeks, from shipments launch day of September 22). We estimate the preorder weighting of the GPS + Cellular version is 80-90%.

Apple Watch Series 3 models equipped with LTE began selling out within 15 minutes of when pre-orders became available for the device on Friday, September 15. It will now take a good three to four weeks to get one of the LTE Apple Watch models, with no in-store pickup available at this time.

The first iPhone 8, iPhone 8 Plus, and Apple Watch Series 3 orders will begin arriving to customers on September 22, the official launch date for the devices.

Apple plans to begin accepting pre-orders for the radically redesigned iPhone X on October 27 ahead of a November 3 launch date.

Article Link: Kuo: Apple Watch Series 3 Demand Higher Than Expected as iPhone X Anticipation Cannibalizes iPhone 8 Pre-Orders

 

[Radon87000]

That's obvious. The X made the iPhone 8 and 8 Plus look like a joke. The only possible caveat is the screen size.

 

[840quadra]

Kuo is great for some leaked information, but all too often information is obvious. That said, we can’t really glean too much information regarding sales by Apple’s store availability, as we don’t know what causes it outside of speculation.

 

[roeiz]

"i won't pay 1000$ for a phone" - yea right.

 

[profets]

With regards to the cellular Series 3 - it's also the only Stainless Steel option.

 

[Superhappytree]

I mean I like Kuo but we didn't really need an analyst to state the bleeding obvious did we?

 

[iapplelove]

I just posted this earlier, but the X is making the home button look old school lol

 

[LordQ]

That is brand new information!

 

[Rogifan]

So he’s just pulling numbers out of his rear end.

 

[TMRJIJ]

Duh... iPhone 8 never stood a chance against the X.

 

[yanki01]

with all due respect, sir. thank you captain obvious.

 

[The Cappy]

It could hardly *not* cannibalize sales.

 

[ActionableMango]

Is buying a higher end model really "cannibalizing" sales? That term is usually used in a bad context, but in this case it's positive news for Apple and its shareholders.

 

[macduke]

I'm sure Apple is fine with their much more expensive iPhone cannibalizing sales. Furthermore, many people who order on launch day are the technology enthusiasts—so it makes more sense that they are waiting to buy the high-end model. Everyone else will order whenever they feel like it—often for a gift, when their old phone breaks or stops getting updates, or whenever their usual upgrade period begins. We're the odd ones who wake up in the middle of the night to order. Things will probably go back to normal post-launch and the iPhone 8 will outsell the iPhone X. If not, then Apple might be in trouble as the supply chain suggests they geared up for many more iPhone 8 models than iPhone X models.

 

[WoodrowCall]

I'm not saying that some aren't waiting for the X to come out. However, many might be like me and are looking at the X as probably not even practically available until after Christmas, and the 8 as not worth the upgrade.

 

[KB24Slam]

I was really hoping the 8 would be more popular so I’d have a better chance at grabbing an X lol dang it.

Does anyone know if there will be launch day in store stock reserves? Or will it be like last year with the 7 plus?

 

[Craiguyver]

With regards to the cellular Series 3 - it's also the only Stainless Steel option.

And the only sapphire crystal display option too.

 

[shareef777]

Kuo is great for some leaked information, but all too often information is obvious. That said, we can’t really glean too much information regarding sales by Apple’s store availability, as we don’t know what causes it outside of speculation.

Yes you can. EVERY iPhone ever released had a month wait time within 24 hours of sale. A week later and I can get any phone I want at my door in one week. The iPhone 8 is a failure. It's not to say Apple failed as I imagine we're going to see record wait times for the iPhone X that will make everyone forget the iPhone 8 exists. The wait times will make the ridiculous wait times we've experienced for the AirPods look like a passing breeze.

 

[Ds6778]

That's obvious. The X made the iPhone 8 and 8 Plus look like a joke. The only possible caveat is the screen size.

A "joke." How?

 

[Greenlee]

Ming-Chi Kuo didn't need to send out a note. We been knew for over a week now.

 

[AZREOSpecialist]

iPhone 8 looks absolutely backward compared to the X, I don't know who would buy an 8 if they already have a 6 or 7. I'm sticking with my 6 Plus, does everything I want and more. The iPhone X is pretty, but Samsung's curved OLED smartphones look much, much better and fulfill the "edge to edge" promise. Apple's OLED implementation in the X is kind of sad, like they lacked the engineering and design resources to give us a true edge-to-edge display.

The fact that the iPhone 8 is not sold out speaks volumes.

 

[stanman64]

I was really hoping the 8 would be more popular so I’d have a better chance at grabbing an X lol dang it.

Does anyone know if there will be launch day in store stock reserves? Or will it be like last year with the 7 plus?

The latter x10, most likely.

 

[psymac]

How did he know I cancelled my iPhone 8 order today?

 

[rizzo41999]

Great to see Apple Watch demand continuing to grow. As a Series 0 owner, it's encouraging.

 

[soanis]

2x "$500 for a phone?"
Developers developers developers developers
Upgrading from a 5S, I think X is such a gimmick. Will probably make do with a 7.