With just days to go before customers can pre-order the new iPhone X, some news reports are pointing to a less-than-sunny outlook for Apple's latest device.
Arriving on the market much later than usual due to several technical and design challenges, the iPhone X can be pre-ordered starting Friday and is set to hit stores on Nov. 3. While Apple said today that the iPhone X would be available for purchase by walk-in customers on that date, a report in the Nikkei Asian Review suggests the company might only be able to ship half as many phones as initially planned.
Meanwhile, early sales of the iPhone 8 and iPhone 8 Plus, unveiled in September at the same time as the iPhone X, might also prove disappointing to Apple. One wireless carrier has described demand so far as "anemic," and early market data indicates adoption of the new devices is much lower than that for previous iPhones at the same stage in their lifecycles.
Manufacturing Challenges and Buyer Skepticism
"The iPhone X really sets the tone for the next decade in technology, it has a lot of new technology in it," CEO Tim Cook said last week in an interview with BuzzFeed News during the opening of a new Apple store in Chicago. "We'll be working as hard as possible to make as many as possible."
According to an exclusive report today in the Nikkei Asian Review, Apple might be able to ship just 20 million units of the iPhone X before the end of the year, around half of what it first planned to ship. Like previous articles about iPhone X challenges, the report blamed the shortfall on difficulties in manufacturing the components for Face ID, Apple's new facial recognition feature for biometric security.
iPhone X manufacturers also struggled with issues surrounding the device's OLED display, a first for an Apple phone, although those problems were "largely resolved around July," the publication reported.
"The iPhone X is currently being produced at a rate of 10 million units per month, but with the sales scheduled to begin on Nov. 3, Apple is likely to only provide 20 million units this year," it said. "Apple is believed to have already started negotiations with other manufacturers over additional production of certain parts, and there is a chance that output volumes could improve rapidly."
On the demand side, however, new design features and the device's $1,000-plus price tag could also chip away at the typically hot market response to a new iPhone. Even Apple co-founder Steve Wozniak has said he prefers to hold off on buying an iPhone X.
"I'd rather wait and watch that one, Wozniak said Monday at the Money 20/20 conference in Las Vegas. "I'm happy with my iPhone 8 -- which is the same as the iPhone 7, which is the same as the iPhone 6, to me."
He added, "For some reason, the iPhone X is going to be the first iPhone I didn't -- on day one -- upgrade to. But my wife will, so I'll be close enough to see it."
Narrow Window for iPhone 8, 8 Plus
Meanwhile, with the iPhone X set to hit the market late next week, the iPhone 8 and iPhone 8 Plus are seeing a narrowing window of opportunity for early sales. So far, those numbers appear to be lagging sales of previous iPhones.
"When comparing the iPhone 8 and 8 Plus to prior year's releases, you can see both good news and bad news for Apple," Localytics, a mobile and Web app analysis site, noted yesterday. "On the positive side, the iPhone 8 Plus is exactly in line with first month's adoption of last year's iPhone 7 Plus (1.4% for the 8 versus 1.5% for the 7 Plus). However, the iPhone 8, with only 1% of the market after one month, is tracking significantly lower than the iPhone 7 (3.6%), iPhone 6S (3.4%) and the iPhone 6 (5.8%) after one month."
The challenge for the iPhone 8 and 8 Plus is that it appears some Apple customers who would normally jump to upgrade their devices are instead waiting until the iPhone X comes out. While all three devices were announced at the same time on Sept. 12, the iPhone 8 and 8 Plus went on sale Sept. 22, leaving them just a little over a month to hold the title as Apple's newest phones.
Image credit: Product shot by Apple; iStock Artist's concept.
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