Wait Time for iPhone X Got Longer -- WSJ
October 28 2017 - 2:02AM
Dow Jones News
After online preorders opened, shipping estimates quickly rose
to five-to-six weeks
By Tripp Mickle
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 28, 2017).
Apple Inc. opened advanced sales for the iPhone X and early
orders pushed estimated shipment dates into December, at least
twice the waits for new models a year ago and an early indication
that demand is outpacing supply for a product Apple has had
difficulties manufacturing.
After online preorders began in 50-plus countries at 3 a.m. ET
on Friday, delivery estimates in the U.S., China, and Japan quickly
rose to five-to-six weeks. The iPhone X officially goes on sale on
Nov. 3, when some phones will be available in retail stores.
By comparison, a full two days after the iPhone 7 and 7 Plus
went on sale last year in the U.S., deliveries were projected to be
made in only one-to-three weeks, according to Loup Ventures, a
venture-capital firm specializing in tech research. In 2014, the
iPhone 6 was expected in a week or less while the iPhone 6 Plus was
expected in three-to-four weeks.
Brian White, an analyst with Drexel Hamilton, said the shipment
delays show the iPhone X is "not a dud" but added "we can't look at
that and say, 'Demand's off the charts,' because we know there's
very limited capacity."
The shipment projections are being scrutinized because they
offer the first insight into consumer appetite for one of Apple's
most anticipated product launches. Investors have sent Apple shares
up about 35% over the past year and pushed the company's market
value above $800 billion, largely on a bet that new iPhones will
deliver record sales.
Apple's ability to deliver largely rests on the iPhone X. The
iPhone 8 and 8 Plus -- which hit the market Sept. 22 and feature
the same basic design as preceding models -- posted the weakest
sales of any of the company's new smartphones in recent years. The
iPhone X offers an edge-to-edge display and facial-recognition
system that led Apple to call it the smartphone of the future.
For the iPhone X to succeed, Apple must prove consumers will pay
$999 or more -- the highest starting price ever for a major
smartphone. The company also must overcome production issues that
delayed iPhone X manufacturing at least a month over the summer.
Production was later slowed by an imbalance in supply of key
components for its facial-recognition camera.
"The biggest risk for Apple is the supply chain," said Raj
Aggarwal, co-founder of Localytics, a mobile engagement firm. "Are
they going to be able to fill preorders for the iPhone X? If they
can, they're in good shape. If they can't, they're going to miss
some numbers this year."
Some customers also experienced early glitches in the ordering
process Friday. In the U.S., some consumers weren't able to log
onto Apple's store to place orders for roughly 10 minutes after the
advertised start time. Some customers world-wide later received
reservation or confirmation numbers but no follow-up emails
regarding their orders.
Analysts expect Apple to provide more clarity on both supply and
demand for the iPhone X when it announces earnings Nov. 2. More
preorders of the iPhone X than the iPhone 8, which starts at $699,
would be encouraging for investors, especially after reports of
weak iPhone 8 sales.
The iPhone X launch comes as Apple aims to shore up its position
as the world's second-largest smartphone maker behind Samsung
Electronics Co. Competition from lower-priced smartphones in China
helped reduce its share of the global smartphone market to 14.5%
last year from 16.1% in 2015, according to market research by
Strategy Analytics.
Despite that, analysts are projecting strong iPhone sales this
year because consumer loyalty is high and many consumers own older
iPhones due for an upgrade. About 95% of iPhone owners who plan to
buy a new device say they will buy another iPhone, according to
UBS, much higher than the 53% of Samsung customers who say they
plan to buy another device from the South Korean phone maker.
It is unclear if iPhone loyalists who plan to upgrade will
choose an iPhone X, iPhone 8 or an older device. Some 40% of
consumers who plan to purchase a new device in the next six months
said they wanted to see the iPhone X at a store before deciding
what model to buy, according to a survey by Creative Strategies, a
tech research firm.
"A good portion of buyers don't have their mind made up," said
Ben Bajarin, an analyst with Creative Strategies.
--Yoko Kubota and Takashi Mochizuki contributed to this
article.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
October 28, 2017 02:47 ET (06:47 GMT)
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