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As the iPhone X goes on sale, demand for the iPhone 8 seems weak

iPhone X bag

Today’s the day you can put in your pre-order for the shiny new iPhone X and, despite the lofty price point, this seems to be the moment most Apple loyalists have been waiting for.

The iPhone X is supposed to be available from 3 November – next week – but already a visit to the UK Apple store reveals that we would have to wait at least 5-6 weeks for it to turn up if we bought it today. That’s getting dangerously close to Christmas.

It’s never easy to read between the lines when it comes to Apple supply constraints. On one hand its new phones are, of course, immensely popular, so such reports appear superficially plausible. However it’s not like this is a new phenomenon and Apple CEO Tim Cook is supposed to be a supply chain genius, so surely it can’t be too difficult to anticipate demand and just make sure you order enough from the manufacturers.

There have been reports that certain components unique to the X are in short supply but you’d think Apple has been doing everything in its power to resolve that. And then there’s always the suspicion that Apple has a marketing interest in creating the impression of overwhelming demand exceeding even its most wildly optimistic expectations.

What does seem likely, however, is that most people looking to buy an iPhone in Q4 are willing to wait for an X. Market trackers CIRP recently came up with some numbers that imply the iPhone 8 and 8+ only accounted for 16% of total US iPhone sales in Q3. This compares unfavourably to last year when the 7 and 7+ accounted for 43% of sales, implying that the majority are waiting for the X.

“It seems when Apple announced the forthcoming iPhone X, it changed the market dynamic, and probably depressed demand for the iPhone 8 and 8 Plus,” said Mike Levin of CIRP. “Both the newly reduced-price iPhone 7 and 7 Plus and older iPhone models continue to see strong demand. …So, rather than waiting for and buying the iPhone 8, it looks like buyers in this quarter either bought existing models, or decided to wait for iPhone X, later in the year.”

You can see the rather cluttered CIRP chart, showing US iPhone sales share by model over the past four years, below. The key bits are the two right hand segments at the end of each bar, which signify the most recent launches. As you can see they account for a much smaller proportion this year than in previous years.

CIRP iPhone chart

It seems likely that Apple will end up shifting a ton of iPhone Xs, which should ensure its profits reach new levels of obscenity. But if this supply problem continues, and people don’t get their lovely new shiny thing until the new year, it could still turn into a bit of a Pyrrhic victory for the gadget giant.


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