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Kuo: Apple Watch Series 3 Demand Higher Than Expected as iPhone X Anticipation Cannibalizes iPhone 8 Pre-Orders
Demand for Apple's high-end flagship iPhone X is "very likely" to cannibalize iPhone 8 pre-orders, predicts KGI Securities analyst Ming-Chi Kuo in a note sent out to investors this morning.
iPhone pre-orders traditionally sell out in September due to high demand, but this year, many models of the iPhone 8 and the iPhone 8 Plus were available for launch day delivery through the weekend, and continue to remain readily available for launch day pickup in Apple retail stores.
Kuo, like many of us, believes this is because many customers are awaiting the iPhone X. KGI is "positive on demand" for iPhone X and believes the market will be conservative on iPhone 8 and its suppliers in the near term. High demand for iPhone X, which does not launch until November, could impact Apple's fourth-quarter earnings results.
He believes pre-order weighting of the GPS + Cellular version of the Apple Watch to be 80 to 90 percent over the non-LTE version, though that prediction does seem somewhat questionable given the limited number of countries where the LTE version of the device was available for purchase.
The first iPhone 8, iPhone 8 Plus, and Apple Watch Series 3 orders will begin arriving to customers on September 22, the official launch date for the devices.
Apple plans to begin accepting pre-orders for the radically redesigned iPhone X on October 27 ahead of a November 3 launch date.
iPhone pre-orders traditionally sell out in September due to high demand, but this year, many models of the iPhone 8 and the iPhone 8 Plus were available for launch day delivery through the weekend, and continue to remain readily available for launch day pickup in Apple retail stores.
Kuo, like many of us, believes this is because many customers are awaiting the iPhone X. KGI is "positive on demand" for iPhone X and believes the market will be conservative on iPhone 8 and its suppliers in the near term. High demand for iPhone X, which does not launch until November, could impact Apple's fourth-quarter earnings results.
Historically, it takes 3-6 weeks or more to ship new iPhone models after they are available for preorder, due to initial tight supply and robust demand. However, our latest review indicates it will take less than 1-2 weeks for the iPhone 8. We believe this is because there is a strong likelihood that iPhone X demand will cannibalize iPhone 8 pre-ordersAs for the Apple Watch Series 3, Kuo says demand for the LTE version of the device was "significantly stronger" than expected, perhaps due to the "low premium of $70" over the non-LTE version of the watch.
He believes pre-order weighting of the GPS + Cellular version of the Apple Watch to be 80 to 90 percent over the non-LTE version, though that prediction does seem somewhat questionable given the limited number of countries where the LTE version of the device was available for purchase.
Before the media event, we forecasted the production weighting of the GPS + Cellular version would be 30-40%. However, the pre-order website shows shipments of this version are taking much longer than those of the GPS version (3-4 weeks, from shipments launch day of September 22). We estimate the preorder weighting of the GPS + Cellular version is 80-90%.Apple Watch Series 3 models equipped with LTE began selling out within 15 minutes of when pre-orders became available for the device on Friday, September 15. It will now take a good three to four weeks to get one of the LTE Apple Watch models, with no in-store pickup available at this time.
The first iPhone 8, iPhone 8 Plus, and Apple Watch Series 3 orders will begin arriving to customers on September 22, the official launch date for the devices.
Apple plans to begin accepting pre-orders for the radically redesigned iPhone X on October 27 ahead of a November 3 launch date.
Buyer's Guide: Apple Watch (Neutral), iPhone 8 (Caution)
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9 months ago
I'm sure Apple is fine with their much more expensive iPhone cannibalizing sales. Furthermore, many people who order on launch day are the technology enthusiasts—so it makes more sense that they are waiting to buy the high-end model. Everyone else will order whenever they feel like it—often for a gift, when their old phone breaks or stops getting updates, or whenever their usual upgrade period begins. We're the odd ones who wake up in the middle of the night to order. Things will probably go back to normal post-launch and the iPhone 8 will outsell the iPhone X. If not, then Apple might be in trouble as the supply chain suggests they geared up for many more iPhone 8 models than iPhone X models.
9 months ago
I'm not saying that some aren't waiting for the X to come out. However, many might be like me and are looking at the X as probably not even practically available until after Christmas, and the 8 as not worth the upgrade.
9 months ago
That's obvious. The X made the iPhone 8 and 8 Plus look like a joke. The only possible caveat is the screen size.
9 months ago
I love the way poor 8/Plus pre-orders are interpreted as a sign of the desire for the X.
Perhaps people aren't upgrading at all? Or perhaps more people are getting better deals from their carriers.
Perhaps more people want to see the device in-store before they purchase it.
Plenty of reasons that aren't "the 8 is crap, everyone wants the X"
I'm an example of someone going from a 7+ to an 8+, and please don't say it's because I can't afford it, or I'll buy your house and turn it into a pig farm, just because.
Perhaps people aren't upgrading at all? Or perhaps more people are getting better deals from their carriers.
Perhaps more people want to see the device in-store before they purchase it.
Plenty of reasons that aren't "the 8 is crap, everyone wants the X"
I'm an example of someone going from a 7+ to an 8+, and please don't say it's because I can't afford it, or I'll buy your house and turn it into a pig farm, just because.
9 months ago
Again, what is so terrible about the 8?
Nothing. Some people must have the latest and greatest. Those that demean the 8 just have small egos or something else. People should just buy what they like and comfortable with and never mind the toads.
9 months ago
You people are crazy with your Watch LTE demand.
You're basically saying "I want to give my carrier $10/month in perpetuity to NOT carry my phone, which I already carry with me all the time anyway." Just get the WiFi version and answer calls without taking your phone out of your pocket.
You're basically saying "I want to give my carrier $10/month in perpetuity to NOT carry my phone, which I already carry with me all the time anyway." Just get the WiFi version and answer calls without taking your phone out of your pocket.
9 months ago
I mean I like Kuo but we didn't really need an analyst to state the bleeding obvious did we?
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