Kuo: Apple Watch Series 4 Pre-Orders Above Expectations, iPhone XS Seeing Lackluster Demand

[wallysb01]

And? Apple clearly doesn't see the need to offer a smaller phone. They know that virtually no one is going to ditch the iPhone over screen size alone. Plus, and more to the point, the XS isn't huge compared to the SE:

XS:
Height: 5.65"
Width: 2.79"
Depth: 0.3"

SE:
Height: 4.87" (3/4" shorter)
Width: 2.31" (less than 1/2" wider [correction narrower])
Depth: 0.3" (the same)

So you don't have some emotional vested interest and have been made a millionaire from Apple stock (big thumbs up, here in bay area >$1M net worth is hardly special), but you feel the need to argue with everyone that makes a point remotely supporting a smaller phone?

And you really did just prove the X/XS is substantially bigger than the SE. The differences between the SE and the XS are MUCH bigger than the differences between the XS and XS Max, both as a percentage and in absolute terms. Its a dramatic difference. The area of the phone is 40% bigger for XS, 20% taller, 16% wider, than compared to the SE. Those numbers are 20%, 9% and ~10% for the XS -> XS Max, respectively.

 

[ipedro]

A lot of people should be eating crow right now. As an early believer in the Apple Watch, I’ve always seen where it was going. The Apple Watch is to the iPhone what the iPhone was to the iPod. A new product obsoleting an insanely popular product. The iPhone killed the iPod at a time when Apple was iPod + iTunes.

Apple Watch will displace the iPhone to become our primary personal computer as Siri improves to where you can talk to your watch in a natural way like an almost human like assistant.

 

[robbyx]

So you don't have some emotional vested interest and have been made a millionaire from Apple stock (big thumbs up, here in bay area >$1M net worth is hardly special), but you feel the need to argue with everyone that makes a point remotely supporting a smaller phone?

And you really did just prove the X/XS is substantially bigger than the SE. The differences between the SE and the XS are MUCH bigger than the differences between the XS and XS Max, both as a percentage and in absolute terms. Its a dramatic difference. The area of the phone is 40% bigger for XS, 20% taller, 16% wider, than compared to the SE. Those numbers are 20%, 9% and ~10% for the XS -> XS Max, respectively.

Well, I'm not in the Bay Area, thank god, so I really don't care what anyone's net worth is down there.

And no, I'm not so emotionally invested where I feel the need to inform people that I will be sending them petty private messages when I'm finally proved right. That's just weird.

The thing is, no one arguing for a smaller phone has made a point. They just say they want it, they see other geeks on Reddit saying they want it too, so it all must be true! They know better than Apple, despite the fact that they've never designed or marketed a consumer product and can't write a lick of code, but they know better!

Give me a break. Apple didn't get to be a trillion dollar company by not knowing what consumers want. It's obvious that Apple does not feel the need to offer a smaller phone than the XS at this point.

 

[PickUrPoison]

Math check: They might make $100 or more in profit per phone on such a device. If they sold 10M phones, that would $1B in PROFIT, not revenue, profit. Even to Apple, who had $10B in profit overall last year, that's a lot.

From July 1, 2017 through June 30, 2018 Apple made over $65 billion in profit, not $10. And the SE isn’t throwing off $100 in profit per unit.

 

[robbyx]

A lot of people should be eating crow right now. As an early believer in the Apple Watch, I’ve always seen where it was going. The Apple Watch is to the iPhone what the iPhone was to the iPod. A new product obsoleting an insanely popular product. The iPhone killed the iPod at a time when Apple was iPod + iTunes.

Apple Watch will displace the iPhone to become our primary personal computer as Siri improves to where you can talk to your watch in a natural way like an almost human like assistant.

That's not going to happen anytime soon. The Watch will definitely improve and become more of a stand-alone device, but there are plenty of things one needs a larger screen to accomplish. I only use my Watch when I work out. Otherwise I don't wear it. No app is pleasant to use on that small screen. I can't imagine using the mapping software I use when backpacking on a Watch screen. I still bring my iPhone to the gym because it's so much easier and faster to log my workouts on the iPhone than fiddle with the same app on the Watch. Even with a much improved Siri (that'll be the day!), there are still so many things that require a larger screen. Even if the Watch had an amazing camera, can you imagine snapping a photo and trying to edit and post it? Terrible user experience. The iPhone and Watch are synergistic products. One is not going to replace the other.

 

[redheeler]

Defend what? The XR is right where it would be expected to be, priced halfway between last year’s 8 and 8 Plus.

iPhones are expensive. If you want a $649 XR, you’re going to have to wait until September 2019.

"iPhones are expensive" is not a justification for the price of the starting iPhone Xr being $100 higher than the price of the starting iPhone 6 in 2014. So far you have yet to defend your point that the Xr is being sold at an "excellent price".

The iPhone Xr is $100 too expensive. Here's why.

Pricing the Xr at $749 to start pushes it into the premium space, as Apple themselves established with the iPhone 6 Plus in 2014. Here the display, lack of 3D Touch, and lack of dual cameras simply doesn't live up to the expectations set by the premium price tag. These are expectations set by both Apple and other manufacturers.

• For just $50 more LAST YEAR, you could get an iPhone that had a 401 PPI LCD display, dual-cameras, 3D Touch, as well as an aspect ratio better optimized for widescreen video.
• For the same $749 price in 2015, you could get an iPhone that had a 401 PPI LCD display, 3D Touch, as well as an aspect ratio better optimized for widescreen video.
  • In other words, the iPhone Xr is missing two impactful features found on a three-year-old iPhone 6s Plus. Not a tempting upgrade for me as a current 6s Plus owner.
• Plenty of Android smartphones at lower price points have OLED screens with a PPI higher than last year's 8 Plus, as well as dual-cameras. 3D Touch is no longer a factor that sets iPhone Xr apart from the competition, so despite the better design and software, it starts to fall short in a comparison for someone who isn't committed to iOS.
  • Yes, I know we can get into an entire conversation about the benefits of iOS vs Android, this is mainly focusing on the hardware.

Apple will sell plenty, but they shouldn't.

Inevitably someone will argue that Apple should have the right to price their products any way they want. While this is true, it doesn't change the fact that the iPhone Xr is more expensive than last year's iPhone 8, and potental buyers should do enough research to know exactly what they are getting for their money.

Here are some plausible reasons Apple assumes they can get away with pricing it at $749, and customers will still buy it:

• It looks like an iPhone X / Xs and has a lower price tag. That's it, just the look.
• It has just enough of the iPhone X feature set to make it seem high-tech (primarily Face ID), and potential buyers will often ignore the shortcomings of the device due to a lack of research or understanding.
  • To make matters worse, the marketing phrase "Liquid Retina" is intended to mislead less-knowledgable potential buyers into thinking this is some kind of brand new display tech, when it really isn't.
• Potential buyers have three choices to stay in the iOS ecosystem: The Xs, a prohibitively expensive smartphone which they may not be able to justify or afford; the Xr; or an older generation with an older design (aside from the discontinued X).
  • It remains to be seen how many of these customers will opt for an 8 / 8 Plus / X, or older generation instead.
• Brand recognition.

 

[gugy]

I'm temped to upgrade my Series 3 to 4. But for the iPhone, I'll keep my 7+ for another year and then wait a bit longer when carriers bring the BOGO program. Honestly, I can't justify paying the price of an Apple laptop for an iPhone. Just too much.
Updating iPhones every 3 years seems to be the right move. I used to do every two years but with prices going up and up it's too much.

 

[EdT]

Apple has the earlier model iPhones still in the sales inventory like that of the 7, 7Plus to sell in developing countries for around the $500+ price tag. It is also sold here too in the U.S.

I wasn't really making a case for a conspiracy. I was pointing out that none of the big smartphone makers still make an SE size phone, and none of the second and third tier manufacturers are doing so either. There isn't a conspiracy, they don't think they can make much money. Or probably more accurately, they DO think they will make more money selling a bigger screened phone.

As pointed out by you, and a lot of others, Apple is selling phones in the $700 dollar range. Although these are 2 to 4 years old, they still have fast processors, good cameras, a healthy amount of memory (although not as much as the newest models). Although these are older designs they are new phones, not refurbished old ones. I also think that the XR will mop up sales when it is released. I was having problems with my 6 but I would need to have it fixed for it to last until the XR is available. I don't know what screen repair costs but for a phone long out of warranty I would guess 2 to 300 dollars at a minimum. Add that cost onto a $750 price for a XR and you've basically back into the Xs and Xs Max price range. And if you switch brands and go to Samsung/Motorola/Google you'd be in the same boat.

I think $750 is a very good price for a phone that has a multiple processors that beat what desk and laptops could do only a few years ago. I don't think it's extravagant.

 

[wallysb01]

Well, I'm not in the Bay Area, thank god, so I really don't care what anyone's net worth is down there.

And why do you think anyone gives a damn about your earnings on Apple?

The thing is, no one arguing for a smaller phone has made a point. They just say they want it, they see other geeks on Reddit saying they want it too, so it all must be true! They know better than Apple, despite the fact that they've never designed or marketed a consumer product and can't write a lick of code, but they know better!

That's a fun string of assumptions. I guess we've devolved to youTube level comments here...

Give me a break. Apple didn't get to be a trillion dollar company by not knowing what consumers want. It's obvious that Apple does not feel the need to offer a smaller phone than the XS at this point.

Typical appeal to authority fallacy. Apple has f-ed up before and will likely f-up again. They not so recently admitted as much with their Mac Pro. The iMac Pro likely exists entirely because of that f-up. I'm guessing Apple has a plan here. Having a 'budget' phone that is 6.1" and $750 isn't likely to last, nor is having the smallest 'new' phone they offer be $1000. Sure Apple hasn't ever reliably given us cheap anything, but this new line up is taking their high end gear and high end prices to a new extreme. We'll see how it works out.

 

[Wildkraut]

i guess Apple should have implemented landscape Face ID (only half joking)

And Landscape DOF camera feature...

 

[Spizike9]

Do you think you can actually see the difference? It's a 6.1 inch screen. A _small_ TV is 3 to 4 times the size. Moderately sized TVs are 6 times the size. Big TVs are 9 times the size. There you might see the difference, but many people wouldn't. On.a 6.1 inch screen, any complaint is pointless.

I’m not sure. I’ll wait and see. But I’m sure there must be some advantages otherwise people wouldn’t want thto nicer screens year after year.

 

[Apple_Robert]

It amazes me that Ming continues to be focused on here when he continues to be wrong. And all we have in this article is more guessing, to cover his butt. Why not poll some random stranger on the street, and then print his postulations? Not much difference.

 

[robbyx]

And why do you think anyone gives a damn about your earnings on Apple?

My point was just that I'm happy because Apple has been a good investment for me and if making a smaller phone makes them (and me) more money, I'm more happy. Why are you so fixated on my investment? Jealous much? Maybe you wish you'd bought a bunch of Apple stock several decades ago too?

That's a fun string of assumptions. I guess we've devolved to youTube level comments here...

Were you reading your own post?

Typical appeal to authority fallacy. Apple has f-ed up before and will likely f-up again. They not so recently admitted as much with their Mac Pro. The iMac Pro likely exists entirely because of that f-up. I'm guessing Apple has a plan here. Having a 'budget' phone that is 6.1" and $750 isn't likely to last, nor is having the smallest 'new' phone they offer be $1000. Sure Apple hasn't ever reliably given us cheap anything, but this new line up is taking their high end gear and high end prices to a new extreme. We'll see how it works out.

Appeal to authority fallacy? Yawn. I love that random folks online think they know better than Apple. It's hilarious. Even more hilarious is when they try to show us how smart they are with analogies and points that make no sense. Apple offered a smaller phone for years. I don't think there's any evidence to suggest that a significant number of consumers want a smaller flagship phone. Got any surveys? Anything other than personal opinions? Look at the iPhone mix that someone else posted a little while ago. The SE accounts of less than 5% of iPhone users.

 

[PickUrPoison]

"iPhones are expensive" is not a justification for the price of the starting iPhone Xr being $100 higher than the price of the starting iPhone 6 in 2014. So far you have yet to defend your point that the Xr is being sold at an "excellent price".

The iPhone Xr is $100 too expensive. Here's why.

Pricing the Xr at $749 to start pushes it into the premium space, as Apple themselves established with the iPhone 6 Plus in 2014. Here the display, lack of 3D Touch, and lack of dual cameras simply doesn't live up to the expectations set by the premium price tag. These are expectations set by both Apple and other manufactures.

• For just $50 more LAST YEAR, you could get an iPhone that had a 401 PPI LCD display, dual-cameras, 3D Touch, as well as an aspect ratio better optimized for widescreen video.
• For the same $749 price in 2015, you could get an iPhone that had a 401 PPI LCD display, 3D Touch, as well as an aspect ratio better optimized for widescreen video.
  • In other words, the iPhone Xr is missing two impactful features found on a three-year-old iPhone 6s Plus. Not a tempting upgrade for me as a current 6s Plus owner.
• Plenty of Android smartphones at lower price points have OLED screens with a PPI higher than last year's 8 Plus, as well as dual-cameras. 3D Touch is no longer a factor that sets iPhone Xr apart from the competition, so despite the better design and software, it starts to fall short in a comparison for someone who isn't committed to iOS.
  • Yes, I know we can get into an entire conversation about the benefits of iOS vs Android, this is mainly focusing on the hardware.

Apple will sell plenty, but they shouldn't.

Inevitably someone will argue that Apple should have the right to price their products any way they want. While this is true, it doesn't change the fact that the iPhone Xr is more expensive than last year's iPhone 8, and potental buyers should do enough research to know exactly what they are getting for their money.

Here are some plausible reasons Apple assumes they can get away with pricing it at $749, and customers will still buy it:

• It looks like an iPhone X / Xs and has a lower price tag. That's it, just the look.
• It has just enough of the iPhone X feature set to make it seem high-tech (primarily Face ID), and potential buyers will often ignore the shortcomings of the device due to a lack of research or understanding.
  • To make matters worse, the marketing phrase "Liquid Retina" is intended to mislead less-knowledgable potential buyers into thinking this is some kind of brand new display tech, when it really isn't.
• Potential buyers have three choices to stay in the iOS ecosystem: The Xs, a prohibitively expensive smartphone which they may not be able to justify or afford; the Xr; or an older generation with an older design (aside from the discontinued X).
  • It remains to be seen how many of these customers will opt for an 8 / 8 Plus / X, or older generation instead.
• Brand recognition.

At $749, the XR has a much larger display, 3GB RAM, better battery life, better rear camera and the TrueDepth camera/FaceID. That alone justifies the bump from the $699 iPhone 8.

There are other improvements as well. Like I said, an excellent price.

 

[Black Magic]

There is no price increase. Seriously, there isn't.

iPhone 7 and iPhone 8 have become cheaper.
iPhone XS costs exactly the same as iPhone X but is quite a bit improved.
iPhone XR is new, it is a lot cheaper than the XS and about the same as the iPhone 8.
iPhone XS Max is $100 or £100 more than iPhone XS. Same difference as between 6 and 6+, 7 and 7+, 8 and 8+.

What is beyond the comprehension of some journalists is that you can also buy these phones either with a ton of memory or with a ******** of memory. And that memory costs money. But it doesn't mean the iPhone is more expensive. It's stupid to say the iPhone XS is too expensive because you can buy it with half a terabyte of memory. Imagine they sold one with 2 TB. Some people would get heart attacks looking at the price, whereas all reasonable people just say "I don't need that much memory".

So you really believe that the price Apple charges for memory upgrades on each phone tier is just right? $749 for a stainless steel watch that can't do much without a phone nearby? Even with cellular you not doing much... So iPhone Xr $749 and Apple Watch 4 Stainless Steel $749. That's absolutely ridiculous.

 

[groadyho]

Never considered buying an Apple Watch before but will be placing an order next week after I get some hands on time at my local Apple store to see which size and and band I want. I suspect I'm not alone.

If anything draws me to Apple, it will be the watch. Then of course I'd have to switch to iPhone to.

 

[tentales]

Apple sells $25 billion in Macs per year, and it’s a profitable business segment. That has little relevance to the SE.

5% may seem like a lot, but that means 95% of customers preferred a larger phone—even though they’re more expensive (and more profitable for Apple).

Sometimes Apple can make a decent business out of a 5% market share product, for instance the Mac Pro.

If they can’t, it gets canceled. If they can figure out a way to make a smaller phone profitable, they’ll bring it out. But it might not have the features or be priced where it’s something you want.



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Your analysis would make sense if there currently was an SE type phone for consumer to make a choice over, there isn't. So by your logic, the iPhone 4, 4S, 5, 5S should never have been built, because their *current* market share is dwarfed by larger phones.

It would be a fair comparison if alongside the XS, XR they'd offer the SE2 with say an A11 to replace the previous model at the same price point. Similar to when the SE equalled most of the 6S specs with a half year lag.

If you offer consumers no alternatives then you can't claim statistics to make the point that smaller phones are dead.

 

[AFDoc]

I'm not wealthy, but I can afford an XS Max at this time. In the future I might not be able to afford such a high end phone. That said, if I can only afford a phone that seems like it had great design or functional features removed from it to be more affordable, I simply won't buy a new phone until I can afford a phone without compromises.

TL;DR; I have OCD and having seen thinner bezels on the XS / XS Max, I can't do the Xr for that reason alone

XR has the same bezels as the Xs Xsmax.

 

[vipergts2207]

You, and a handful of others, can repeat this all day long, but that doesn't make it true. There's no evidence that consumers want a smaller phone. None. Zip. Zero. If that were true, other brands would be making tiny flagship phones, but they're not.

The egos some people have thinking they know better than Apple just because they want it... How narcissistic. Ugh.

The XS is only slightly larger than then SE, as I noted in another post. No one is going to ditch the iPhone over 1/2".

It’s not only about the size of the chassis, the screen is too big to use with one hand. I thought it hilarious when people were complaining about the swipe down gesture from the left ‘ear’ being too difficult to do. Well no ****, you bought a phone with almost a 6” screen.

 

[tentales]

Maximizing profits means that you’re better off canibalizing your own sales than letting someone else do it. That’s not “marketing BS.”

Oh c'mon, marketing by its very definition today is BS. Just look at the car industry.
Apple is particularly good at it these days.

 

[Glockworkorange]

Really? I think it is the best one to get.

I also wrote a post predicting the Xr will be the best selling iPhone by a wide margin.

 

[joshkhaos1]

The XR is weird to me and gives off a iPhone 5C type vibe. Really not feeling it especially at $750...I wouldn't call that "budget". I think they should have done the SE 2 with the X design - something a lot of people actually were asking for.

I opted for XS Max - I am coming back over from Android. I wouldn't have gone with XR even if it had been available at launch.

 

[groadyho]

The guts otherwise are the same as the Xs series (removal of force touch is a feature IMHO). In day to day use only folks who read specs will really notice the difference in the screen, and like the notch that too wont matter after a day or two.

Trust me I notice a big difference in display from my galaxy s9+ 538ppi to my Lumia 1520 lcd 367ppi

 

[Glockworkorange]

Yeah stick to supply chain leaks Kuo. As an “analyst” he just makes it up, educated guesses sure but no inside knowledge. There’s no way he could possibly know actual demand, just like he didn’t know prices or names on this year’s iPhones.

He can know demand by surveys and focus groups. No need for inside info to find out what people want.

 

[joshkhaos1]

I also wrote a post predicting the Xr will be the best selling iPhone by a wide margin.

It's the cheapest by a large margin so how is that surprising? Remember when the market was flooded with sellers of 16GB iPhones? Same thing with XR...they are going to be everywhere.