Ming-Chi Kuo Says iPhone XR Demand Has Been Lower Than Expected, Slashes Shipment Estimates

[Baymowe335]

I’ve seen around 20 X style iPhones ever in the wild so if the data is unreliable then I doubt it’s too far off. The CEO of carphone warehouse the biggest mobile retailer in the UK even said on the BBC earlier this year that 25% less people were upgrading through them and newer devices were struggling against older cheaper phones. I don’t think it’s far fetched to see that the expensive iPhones are not as appealing as the cheaper ones.

What you’ve seen literally has zero significance. Zero.

Cook told us the X was the most popular iPhone since release and he said it 2 quarters in a row. Fact.

$761 ASP, fact.

217M iPhones sold, fact.

Tell me how you get to $761 ASP of 217M devices without X being a hit.

Tell me why the entire new lineup looks like the X if it wasn’t a hit.

 

[ipponrg]

You are asking @The-Real-Deal82 for specifics but not providing any yourself.

The iPhone X was the best selling smartphone in the world in Q1 2018 as you would expect but it was overtaken by the new Samsung phones when they released and counterpoints research had the iPhone X market sales share as only 0.3 % ahead of the 8 Plus.

I think you misunderstood Baymowe's post. You must have a narrow specific view on things in order to fully comprehend similar posters' views on these issues. If Apple says X is its #1 smartphone in the world, then it is its #1 smartphone in the world in their narrative. If they sold 1 "model A" phone for $1000 vs. 999 "model B" phones for $1, the model A phone is technically its #1 smartphone in a specific narrative.

Apple's word of "best selling" vs inferential data: https://www.statista.com/statistics/804398/us-iphone-sales-by-model/

 

[Tec972]

I consider Apple's devices very bland.. Sorry!! It is just a boring device. Got a new xs Max and i cant even be excited about it. Only bought it because my 7 plus stopped working. Was going to hold out to boycott Apple's awful greed and pricing. I would have kept that phone as the Xs Max really doesn't do much more. Dont care for face ID after using it for 2 months. Its ok but not worth the extra cost because it doesn't do anything more than touch ID did. Face ID added a big cost to iPhone nobody asked for. It's OK, but not for a price premium.

 

[The-Real-Deal82]

What you’ve seen literally has zero significance. Zero.

Cook told us the X was the most popular iPhone since release and he said it 2 quarters in a row. Fact.

$761 ASP, fact.

217M iPhones sold, fact.

Tell me how you get to $761 ASP of 217M devices without X being a hit.

Tell me why the entire new lineup looks like the X if it wasn’t a hit.

Huh? What’s that got to do with my countries sales?! You are talking overall global sales and I clearly wasn’t.

 

[turbineseaplane]

No he didn't.

Jos said..

iPhone XR "been our most popular iPhone each and every day since the day it became available.”

I don't know really what to make of anything Apple says anymore, especially on stuff like this.

They could really say anything they want as nobody has any way of knowing the truth.

 

[Rob_2811]

I think you misunderstood Baymowe's post. You must have a narrow specific view on things in order to fully comprehend similar posters' views on these issues. If Apple says X is its #1 smartphone in the world, then it is its #1 smartphone in the world in their narrative. If they sold 1 "model A" phone for $1000 vs. 999 "model B" phones for $1, the model A phone is technically its #1 smartphone in a specific narrative.

Apple's word of "best selling" vs inferential data: https://www.statista.com/statistics/804398/us-iphone-sales-by-model/

Yes I understand. My point is when counterpoint carried out their research for April (link below) both of Samsungs new phones were outselling the iPhone X and the iPhone 8 Plus had the same sales market share. The iPhone 8 was only 0.2% less.

https://www.counterpointresearch.co...ecomes-bestselling-model-surpassing-iphone-x/

This lends credence to what @The-Real-Deal82 is saying.

The iPhone X may have been the best seller immediately after release but there is data to suggest that evened out in the Spring.
[doublepost=1544902923][/doublepost]

I don't know really what to make of anything Apple says anymore, especially on stuff like this.

They could really say anything they want as nobody has anyway of knowing either way.

Exactly.

 

[falainber]

Well that's silly. I'm saying a Ferrari cost more to manufacture than a Honda Civic. In the same vein, I'm guessing the Xs Max costs more to manufacture than a $50 phone. Foxconn really doesn't manufacture the parts, they assemble them, so that is what I mean. An Xs Max could cost more to assemble than a $50 phone.

Of course, the "Tim Cook" is a sucker" was really needed.

"Cost to manufacture" is not the same as cost to assemble. All phones have mostly the same parts (and flagship Huawei and Xiaomi phones have more parts than XR) so assembling should cost about the same. Regardless, it was not me who brought Foxconn into discussion. The burden of proof (of how much Foxconn revenue depends on iPhone) is on those who tried to use Foxconn healthy revenues as evidence that iPhone sales can't be bad.

 

[Piggie]

I think most of us can understand the problem here, and will hit Apple probably the hardest of most companies.

Phones of the past were quite poor, and always in need of improvement, their speed, their screens, their camera's etc.
Over the past decade-ish, these things have been improved more and more.
In the early years each upgrade was quite dramatic as companies took large steps so that that years phone was significantly better than the previous year.
Plus of course, the phones were around half todays price also.

As with all products, you can't maintain this curve and starts to flatted out and eventually almost plateau.

Most normal consumers, were keen and excited in past years as they could see how much better the new phone was that they paid for that year, but as we know, this difference is getting less and less.

Not only is this happening, but the VERY bad low end phones, due to tech prices in general are able to make phones now that are very budget, than would have been amazing big name flagship models a few years earlier.

This can't carry on, the cheap? phones will year by year get better and better, nearer and nearer to the big brand phones.
The big brand phones will not be able to come up with anything THAT different to keep normal people upgrading.

More and more people will look at their phone, and it's costs, and think, I'll keep this another year, or two.

I can see this happening in quite a dramatic short time-scale.

Apple of course knows this, and is trying to work out what they can do to get income from "Services" as their golden goose is running out of steam.

 

[Rob_2811]

I consider Apple's devices very bland.. Sorry!! It is just a boring device. Got a new xs Max and i cant even be excited about it. Only bought it because my 7 plus stopped working. Was going to hold out to boycott Apple's awful greed and pricing. I would have kept that phone as the Xs Max really doesn't do much more. Dont care for face ID after using it for 2 months. Its ok but not worth the extra cost because it doesn't do anything more than touch ID did. Face ID added a big cost to iPhone nobody asked for. It's OK, but not for a price premium.

Yup.

Apple has done this with a few things recently aswell, add something superfluous and charge more. The MacBook Pro Touch Bar being one very obvious example.

 

[vooke]

Silliest strategy; increase prices to hide dropping unit sales

 

[Baymowe335]

I consider Apple's devices very bland.. Sorry!! It is just a boring device. Got a new xs Max and i cant even be excited about it. Only bought it because my 7 plus stopped working. Was going to hold out to boycott Apple's awful greed and pricing. I would have kept that phone as the Xs Max really doesn't do much more. Dont care for face ID after using it for 2 months. Its ok but not worth the extra cost because it doesn't do anything more than touch ID did. Face ID added a big cost to iPhone nobody asked for. It's OK, but not for a price premium.

FaceID is not the end of facial mapping or depth sensing. It’s a feature available today but part of a larger technological shift for future implementation and functionality of the technology.

Apple will be ahead in this area as a result of pioneering this implementation of facial recognition in mobile devices.

You, like most people, forget the big picture.

It was never about FaceID instead of TouchID.

 

[I7guy]

"Cost to manufacture" is not the same as cost to assemble. All phones have mostly the same parts (and flagship Huawei and Xiaomi phones have more parts than XR) so assembling should cost about the same. Regardless, it was not me who brought Foxconn into discussion. The burden of proof (of how much Foxconn revenue depends on iPhone) is on those who tried to use Foxconn healthy revenues as evidence that iPhone sales can't be bad.

But you or I don't really know. Do we. This is all conjectures.
[doublepost=1544905142][/doublepost]

Right. And the iPhone XR does not compare well with the Pixel 3 or Pixel 3 XL. The only reason that isn't a bigger problem for Apple is twofold:

1. Google is only a minor hardware player
2. Samsung, the only other super hardware provider in the US, sells phones at ridiculous prices as well

[doublepost=1544900681][/doublepost]
Car analogies are a telltale sign of misunderstanding the phone market.

They are actually very similar in some ways. Not understanding that is a telltale sign of misunderstanding the phone market and the car market.

 

[Blaze4G]

I didn't say Apple didn't care about unit sales in an absolute sense. But it's clear with services revenue growing, absolute iphone unit sales will play less of a role in the revenue and profits.(imo)
[doublepost=1544895586][/doublepost]
The iphone Xs max is expensive, but not the most expensive phone out there. People's affordability varies, and I'm not clear the phone is marketed for "everybody". The line of affordability and value vs price is different for all of us. Some people won't buy a $500 phone. This isn't about who owns AAPL or not.

I'm not debating the iphone Xs max is expensive. I'm debating the notion the apple raised the price on the Xs Max given there is no equivalent model to compare it to.

You're missing my point though. I personally think service revenue correlates with hardware sales for Apple. So they NEED unit sales to increase or at least be consistent so that service revenue can increase.

 

[I7guy]

No, Apple is hoping that the customers willing to pay $1300 would upgrade yearly. if I pay $1300 for an iPhone XS Max, I sure as hell won't upgrade yearly. So this will work in the short term but over the long term it seems unlikely to me imo as the phone is starting to cost as much as a high end computer and the value derived from an iPhone is nowhere close to a real computer.

Really? You honestly think Apple thinks it's customers are going to upgrade a $1300 phone yearly? To me that thinking is a bit off.

You also think that into today's day and age where many people are glued to their cell phones they don't think the value derived is anywhere close to a real computer? Why do you think the ipad can replace a "real" computer. Because a lot of what happens on cell phones is snapchat, instagram, facebook, netflix, youtube and emails.(imo) Sure as shooting don't need a high end nvidia card for that.
[doublepost=1544905424][/doublepost]

You're missing my point though. I personally think service revenue correlates with hardware sales for Apple. So they NEED unit sales to increase or at least be consistent so that service revenue can increase.

I think service revenue is somewhat disassociated from hardware sales. You don't need a new iphone to become an apple music subscriber or get icloud storage or subscribe to the as yet unnamed streaming service, or pay for an app, etc.

 

[AustinIllini]

They are actually very similar in some ways. Not understanding that is a telltale sign of misunderstanding the phone market and the car market.

Not in the ways you're mentioning. Apple is mainstream. They're charging super premium prices. Not analogous to any one car company.

 

[BrooksA]

Exactly. And my wife didn't want the big one, but the Pixel 3 XL is regularly discounted (I paid $750 for mine). While I appreciate that switching ecosystems is a bit of a pain, the difference between an $1099 iPhone and a $750 Pixel 3 XL is worth it.[/QUOTE]

How did you both find the change in ecosystems? I'm not particularly invested in Apples' services and I'm thinking of a Pixel 3.

 

[Baymowe335]

You're missing my point though. I personally think service revenue correlates with hardware sales for Apple. So they NEED unit sales to increase or at least be consistent so that service revenue can increase.

They are already doing it. It’s in the data. Looks at services growth.

There are so many ways to monetize an existing user base of 1.3B devices. Sure, selling more hardware helps, but you don’t have to sell more than ever to do it.

Even flat or small unit sales declines can mean huge services growth. Apple has grown services at 25% with flattish unit sales for 3 years. They are moving to monetizing the base, because the base is huge.

 

[Gilligan's last elephant]

. Foxconn really doesn't manufacture the parts, they assemble them, so that is what I mean. An Xs Max could cost more to assemble than a $50 phone.

But same ballpark as a Huawei Mate 20 Pro or Huawei P20 Pro.

 

[ipponrg]

The MacBook Pro Touch Bar being one very obvious example.

I think that irked me a lot because it literally added an extra $300 to the cost of the MBP.
[doublepost=1544912334][/doublepost]

They are already doing it. It’s in the data. Looks at services growth.

There are so many ways to monetize an existing user base of 1.3B devices. Sure, selling more hardware helps, but you don’t have to sell more than ever to do it.

Even flat or small unit sales declines can mean huge services growth. Apple has grown services at 25% with flattish unit sales for 3 years. They are moving to monetizing the base, because the base is huge.

It's easy to grow from nothing.

 

[I7guy]

But same ballpark as a Huawei Mate 20 Pro or Huawei P20 Pro.

I don’t know what the ballpark is for any phone. Can’t assume anything.

 

[Rob_2811]

Ah the old Apple services line, iPad growth small, iPhone sales flat. Just point to anything that shows some growth.

You don't maintain $260 billion a year selling iCloud storage, Music subs and Reece Witherspoon dramas

 

[Michael Scrip]

Yes I understand. My point is when counterpoint carried out their research for April (link below) both of Samsungs new phones were outselling the iPhone X and the iPhone 8 Plus had the same sales market share. The iPhone 8 was only 0.2% less.

https://www.counterpointresearch.co...ecomes-bestselling-model-surpassing-iphone-x/

This lends credence to what @The-Real-Deal82 is saying.

The iPhone X may have been the best seller immediately after release but there is data to suggest that evened out in the Spring.

Thanks for the link.

The Counterpoint data is from April... and it says that the Samsung Galaxy S9 was the best-selling smartphone at that time surpassing the iPhone X.

But just so we're clear... the Samsung Galaxy S9 was released just one month prior... in March.

So it really doesn't surprise me to hear that a one-month old Samsung phone was outselling a five-month old Apple phone.

What is surprising is that there was only 0.3% market share difference between the two.

You'd think the Galaxy S9 would absolutely stomp the iPhone X in sales considering how everyone freaked out about the price and said things like "nobody will buy a $1,000 phone..."

But instead... they were very close.

Yes... Samsung got the "win" in April... but just barely.

And fast-forward a couple months... and Counterpoint shows that the Galaxy S9 was no longer #1 on the list.

The smartphone market is ever-changing.

 

[apolloa]

Shocking news... Koh gets it wrong.. again.. his predictions of sales figures are wrong again...

And people treat him like an Apple news God?
[doublepost=1544916588][/doublepost]

Why would anyone go for LCD when OLED is available? The XR is redundant. I am not expecting Apple to introduce its new upgraded version next year.

Perhaps you need to ask computer monitor manufactures that question.... last time I checked they were not redundant and the majority are LCD....
Oh and it’s such a shame, the brand new iPad Pro models ALL being utterly redundant, because your logic says so....

And of course with the iPhone, if you like using True Rome then your not going to chose an OLED screen... because it looks crap! It was built for LCD and it shows!

 

[brofkand]

The $300 is for trade-in of a 7 Plus, which are certainly going for more on eBay. Your point loses its impact when it isn’t based on facts.

Thank you for the correction, I now have egg on my face! :-X

 

[Rob_2811]

Thanks for the link.

The Counterpoint data is from April... and it says that the Samsung Galaxy S9 was the best-selling smartphone at that time surpassing the iPhone X.

But just so we're clear... the Samsung Galaxy S9 was release just one month prior... in March.

So it really doesn't surprise me to hear that a one-month old Samsung phone was outselling a five-month old Apple phone.

What is surprising is that there was only 0.3% market share difference between the two.

You'd think the Galaxy S9 would absolutely stomp the iPhone X in sales considering how everyone freaked out about the price and said things like "nobody will buy a $1,000 phone..."

But instead... they were very close.

Yes... Samsung got the win in April... but just barely.

And fast-forward a couple months... and Counterpoint shows that the Galaxy S9 was no longer #1 on the list.

The smartphone market is ever-changing.

Yes, Baymowe335 had disputed that the cheaper iPhones were out selling that X and said the X was the best selling phone in the world, although that is true of the period just after release it wasn't consistent,.

The Samsung phones over took it after they released and by July both the Samsung S9 and the iPhone 8 were bigger sellers.