Kuo Predicts 'Better Than Expected' Replacement Demand for iPhone XR, Raises Shipment Forecasts

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Demand for the iPhone XR will be higher than demand for the iPhone 8 last year, Apple analyst Ming-Chi Kuo reiterated in a note to investors this morning.

Kuo is predicting better than expected replacement demand for iPhone XR along with improved supply starting in October, leading him to revise his predicted shipment estimates.


Apple is now expected to ship 36 to 38 million iPhone XR units in the fourth quarter of 2018, up 10 percent from an original estimate of 33 to 35 million units.

As he said last week in a note about the XR driving upgrades in China, Kuo is expecting the iPhone XR to outsell the iPhone 8 because of its larger display, longer battery life, dual-SIM support, and new form factor design.

With the revised XR shipment expectations, Kuo believes Apple will ship a total of 75 to 80 million iPhone units during 4Q2018.

iPhone XR shipments are also expected to be up in the first quarter of 2019, a historically slow quarter for Apple. Quarter over quarter decline is expected to be at 25 to 30 percent instead of 45 to 50 percent for iPhone 8.
We expect XR shipments to beat low seasonality in 1Q19. We forecast that XR shipments in 1Q19 will decline 25-30% QoQ to 27-30mn units, and we attribute the lower XR shipment QoQ decline, compared with general consumer electronics and smartphones' 30-40% QoQ decline, to better replacement demand and production delay. Also, XR's shipment QoQ decline in 1Q19 will be better than the iPhone 8 series' 45-50% in 1Q18.
Total iPhone shipments in the first quarter of 2019 are expected to grow by 10 percent year-over-year to 55 to 60 million units thanks to the strength of the iPhone XR. Shipment allocations of XS, XR, and legacy models will be at 35 percent, 50 percent, and 15 percent respectively.

Apple's iPhone XR will be available for pre-order at 12:01 a.m. Pacific Time on Friday, October 19, with an official launch to follow on Friday, October 26. Apple's colorful new iPhone will be priced starting at $749 for the entry-level model.

Article Link: Kuo Predicts 'Better Than Expected' Replacement Demand for iPhone XR, Raises Shipment Forecasts
 

AngerDanger

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Dec 9, 2008
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Demand for the iPhone XR will be higher than demand for the iPhone 8 last year, Apple analyst Ming-Chi Kuo reiterated in a note to investors this morning.
Makes sense; the iPhone XR isn't as visually far apart from the other iPhones as the 8 was from the X. Most customers will probably just notice it's $250 cheaper and won't really care about OLED and the… the… even I'm forgetting the other features it lacks.
 

longhorn2004

macrumors newbie
Nov 8, 2017
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I have a 6S Plus and sat out the last "cycle" because I am not dropping $1000 on a phone, and I bet there the majority think like me. The Xr phone is 95% of the $1000 phone XS for $750 ( or less when Best Buy start their gift cards marketing scheme), and we have financial geniuses stating it may be a super "cycle". That's really going out on a limb.
 

m4mario

macrumors regular
May 10, 2017
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The most underrated Apple product. The XR is one of the best iPhones Apple has made recently, A truly forward looking phone for a much better cost.

And people who claim it's still overpriced, please remember the as per the profit and loss statement, Apple's Net profit margin is 21%. Google was 22% a year back and Samsung is 18%. So its priced just about right for what it is.
 
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ryanwarsaw

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Apr 7, 2007
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I have a 6S Plus and sat out the last "cycle" because I am not dropping $1000 on a phone, and I bet there the majority think like me. The Xr phone is 95% of the $1000 phone XS for $750 ( or less when Best Buy start their gift cards marketing scheme), and we have financial geniuses stating it may be a super "cycle". That's really going out on a limb.
Yeah I think you are pretty typical of what many people are doing. You still get a nice shiny new toy without dropping a grand. I think for most people it makes the most sense.
 
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Cosmosent

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Apr 20, 2016
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RE: "As he said last week in a note about the XR driving upgrades in China, Kuo is expecting the iPhone XR to outsell the iPhone 8 because of its larger display, longer battery life, dual-SIM support, and new form factor design."

That, plus the fact that "to Most," the iPhone 8 looks alot like the iPhone 7, alot like the iPhone 6s, & alot like the iPhone 6 !
 

Relentless Power

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Jul 12, 2016
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I Still think it was a brilliant move for Apple to separate the XR to have its own launch in October. Although, not much marketing has followed the XR since the keynote, but I suspect with a variety of colors, new form factor with Face ID, its really the only marketing it needs.
 
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gsmornot

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I have a 7 Plus and 8 Plus I want to trade into Apple to get a XR for my wife. Wonder if I can do that with the preorder or if I will have to wait and take both to a store once they are in stock. I guess I will message Apple unless one of you has an idea. Both of the Plus devices are paid in full and unlocked.
 

nutmac

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Mar 30, 2004
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iPhone 6 design is now 4 years old, so there's a pant up demand for those wanting a phone with a new, next generation design.

Apple is playing an interesting strategy to get folks to gradually move toward the next generation iPhone platform, last year with iPhone X at $999, and this year with iPhone XR at $799.

For 2019, I suspect Apple will make a smaller iPhone XR based on iPhone XS, priced at $699.
 

sundog925

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Dec 19, 2011
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Isn't this "analyst" retired from apple speculation? he made a huge deal about it and were still talking about him? yeeeeshhhh. slow day.
 

EdT

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Makes sense; the iPhone XR isn't as visually far apart from the other iPhones as the 8 was from the X. Most customers will probably just notice it's $250 cheaper and won't really care about OLED and the… the… even I'm forgetting the other features it lacks.
Single camera and lower screen resolution.

I don’t think most people would notice that the camera has only one lens or that the screen resolution isn’t as high. Maybe if they are trying to view 4K video or something similar. Being mid $700 rather than $900 plus for the Xs line probably is a bigger deal than anything that the phone doesn’t have, especially since the processor is the same as the top of the line phones.
 
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nutmac

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And in other news the pope is catholic. Stay tuned to the obvious :)
Well, many folks on MacRumors forum thinks XR is "doomed, doomed I tell ya" due to low resolution screen (ironically enough, only the "green" pixels on XS and XS Max have higher resolution).
 
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naturalstar

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Mar 9, 2012
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This phone will do very well. More than a few I know have spoken of getting the Xr for their teenagers and/or other family members. Funny how $749 is now thought of as easily affordable for purchasing multiple additional devices. When comparing against $999-$1499, yes, psychologically, it would definitely look that way.

Smart Apple, smart.
 

AndyDiamond

macrumors 6502
Jul 12, 2004
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The XR will indeed =be a big seller.
The red, black and white will probably be the biggest sellers at pre-order time but I think we may be surprised about how well the other colors sell when people see them in store.
 
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Mackinjosh

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Aug 21, 2014
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And people forget the iPad Pro (fantastic screen) is 264PPI. I couldn't see a pixel if I tried.
Same goes for my MacBook Pro Retina.
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This phone will do very well. More than a few I know have spoken of getting the Xr for their teenagers and/or other family members. Funny how $749 is now thought of as easily affordable for purchasing multiple additional devices. When comparing against $999-$1499, yes, psychologically, it would definitely look that way.

Smart Apple, smart.
You're damn straight. Apple's genius move wasn't getting a few dummies to buy 1000+ dollar phones. It was using 1000+ dollar phones to convince other dummies (me) to buy 750 dollar phones thinking they were getting a good deal.
 

Baymowe335

macrumors 603
Oct 6, 2017
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Single camera and lower screen resolution.

I don’t think most people would notice that the camera has only one lens or that the screen resolution isn’t as high. Maybe if they are trying to view 4K video or something similar. Being mid $700 rather than $900 plus for the Xs line probably is a bigger deal than anything that the phone doesn’t have, especially since the processor is the same as the top of the line phones.
And yet, Apple customers have proven they either (or all) that they:

1) Don't look at price.
2) Only look at the monthly price, so increases aren't very significant on a per month basis.
3) Want iOS at any price because they don't want to use Android.

I don't know why people keep talking about price as if it's this huge factor. I don't think it is and the numbers show people are perfectly willing to spend more than $1,000 on their iPhone. The iPhone is underpriced if anything. Apple has huge pricing power if they want to use it.