KGI: Larger-Sized iPhones Coming This Year Will Offset Weakening Demand for iPhone X in China

Weaker-than-expected demand for iPhone X in China has led market analysts to revise down shipments for the first half of 2018, but larger-sized iPhone models in the pipeline should see Apple grow its overall worldwide shipments year-on-year, according to KGI Securities analyst Ming-Chi Kuo, who shared the information in a new research report obtained by MacRumors.

kgi three iphones 2018

We revise down 1Q18 and 2Q18 shipments of iPhone X to 18mn units and 13mn units, respectively, lower than market consensus of 20-30mn and 15-20mn units. We expect iPhone X will go to end of life (EOL) around mid-2018 and that total life cycle shipments will be around 62mn units, lower than our previous forecast of 80mn units.

Two main reasons are given for the weaker-than-expected demand for iPhone X in China. First, in Q4 2017, consumers were willing to wait on average 10 months longer before replacing their existing phones, compared to shorter replacement cycles in the year-ago quarter. In Q4 2016, smartphone users upgraded after between 14 and 16 months of ownership, compared to between 24 and 26 months in Q4 2017. The numbers are said to be reflected in lower shipment forecasts by Chinese phone makers for the second half of last year.

The second big factor is said to be Chinese consumers' penchant for larger displays. According to Kuo, the notched design on the iPhone X isn't yet compatible with many popular Chinese apps, leading many customers to see it as offering less usable screen space than 5.5-inch iPhone Plus models. This confusion, coupled with the high price of iPhone X, is thought to have undercut replacement demand.

Despite the downward revisions in shipments for the first half of this year – and Kuo's moot point that Apple might end iPhone X sales in the summer – Kuo believes overall iPhone shipments will maintain year-on-year growth of 0-5 percent over the first half of 2018, mainly thanks to Apple's corrected supply chain share. However, Kuo thinks Apple's next product line-up will significantly improve competitiveness in the second half of the year, when Apple's "real super cycle" will kick in.

Kuo has previously predicted Apple will introduce three iPhones in 2018: an OLED model that measures in at 5.8 inches like the current iPhone X, an OLED model that measures in at 6.5 inches that will serve as a sort of "iPhone X Plus," and a 6.1-inch model that features an LCD display. Kuo believes all three models will be equipped with a full-screen notched design and TrueDepth camera system like the iPhone X.

We believe the addition of 6.5-inch OLED and 6.1-inch LCD iPhone models will boost Apple's market share in China, and that the US$650-750 6.1-inch LCD iPhone will make it easier for users worldwide to own a 3D sensing and full-screen design iPhone which offers an innovative user experience.

For these reasons, Kuo believes iPhone shipments will grow 5-10 percent year on year over 2018. Kuo's estimate is better than the market consensus of overall smartphone shipment growth worldwide, which is expected to experience between a 5 percent decline and 5 percent growth. As a result, KGI retains a positive outlook for the iPhone supply chain in the second half of 2018.

Related Roundup: iPhone XS

Top Rated Comments

usersince86 Avatar
41 months ago
Some still prefer a smaller phone ... new processor for the SE, please!
Score: 23 Votes (Like | Disagree)
Rychiar Avatar
41 months ago
I don’t understand the appeal of a phone larger than the X. It’s like perfect size. My 7 plus isn’t exactly comfortable and I have huge hands. Do they all hold their phones with 2 hands over there?
Score: 19 Votes (Like | Disagree)
charlieasmith96 Avatar
41 months ago
('https://www.macrumors.com/2018/01/19/kgi-larger-iphones-to-offset-weak-iphone-demand/')

According to Kuo, many potential buyers are under the misapprehension that iPhone X's notched design means it has a smaller screen than 5.5-inch iPhone Plus models. This confusion, coupled with the high price of iPhone X, is thought to have undercut replacement demand.

The iPhone X does have a smaller screen by surface area than the iPhone Plus models. Why is this a misapprehension?
Score: 17 Votes (Like | Disagree)
apolloa Avatar
41 months ago
“many potential buyers are under the misapprehension that iPhone X's notched design means it has a smaller screen than 5.5-inch iPhone Plus models. This confusion, coupled with the high price of iPhone X, is thought to have undercut replacement demand. ”


I thought this was an actual fact and not a misapprehension???
Score: 16 Votes (Like | Disagree)
nfl46 Avatar
41 months ago
Weak demand for the X in general. ;)
If I were a company, I’d take Apple’s iPhone X weak demand over competitors. ;)
Score: 15 Votes (Like | Disagree)
kerplunknet Avatar
41 months ago
I would buy the iPhone X (again) if:
[LIST=1]
* It didn't have the notch. This is a big deal. It looks stupid. I don't care what any of you fanboys say.
* Face ID could be disabled in favor of Touch ID. I'm not cool with the FaceID lasers burning my retinas with its IR lasers every time I'm using my phone.
Score: 14 Votes (Like | Disagree)

Top Stories

whatsapp privacy banner

WhatsApp Reveals What Happens to Users Who Don't Agree to Upcoming Privacy Policy Changes

Sunday February 21, 2021 1:11 am PST by
WhatsApp has revealed how it will gradually limit the features available to accounts held by users who do not accept the platform's impending privacy policy changes, due to come into effect on May 15. WhatsApp's new banner explaining the privacy policy changes According to an email seen by TechCrunch to one of its merchant partners, WhatsApp said it will "slowly ask" users who have not yet...
new airpods leaked image 52audios

Alleged Leaked Image Claims to Show Third-Generation AirPods and Case

Sunday February 21, 2021 2:49 am PST by
A new image claims to offer our first real world look at Apple's next-generation AirPods. The image, shared by 52audio, showcases both AirPods and the charging case for what the site claims to be the third iteration of the wireless earbuds. 52audio has in the past shared images claiming to showcase different parts of the third-generation AirPods. Most notably, the site in November shared...
2021 mbp sd slot feature2

Kuo: New MacBook Pro Models With HDMI Port and SD Card Reader to Launch Later This Year

Monday February 22, 2021 8:52 pm PST by
Apple plans to release two new MacBook Pro models equipped with an HDMI port and SD card reader in the second half of 2021, according to analyst Ming-Chi Kuo, who outlined his expectations in a research note obtained by MacRumors. The return of an SD card reader was first reported by Bloomberg's Mark Gurman last month. "We predict that Apple's two new MacBook Pro models in 2H21 will have...
mac security privacy

Apple Takes Step to Prevent Further Spread of 'Silver Sparrow' Malware on Macs

Monday February 22, 2021 6:13 am PST by
Over the weekend, we reported on the second known piece of malware compiled to run natively on M1 Macs. Given the name "Silver Sparrow," the malicious package is said to leverage the macOS Installer JavaScript API to execute suspicious commands. After observing the malware for over a week, however, security firm Red Canary did not observe any final payload, so the exact threat to users remains a...
iphone 12 pro display video

BOE Rumored to Supply iPhone 13 Display Panels After iPhone 12 Failures

Monday February 22, 2021 9:54 am PST by
Display manufacturer BOE will be one of the main suppliers of OLED panels for iPhone 13 models, according to a new report today from Taiwan's Economic Daily News. BOE is said to be working with touch panel manufacturer General Interface Solution (GIS), part of the Hon Hai Group to develop OLED panels. Multiple iPhone 12 rumors suggested that BOE would supply some panels for the devices,...
pink squares macos

Apple Investigating Issue With 'Pink Squares' Appearing on Displays Connected to M1 Mac Mini

Sunday February 21, 2021 11:08 am PST by
In an internal memo this week, obtained by MacRumors, Apple informed service providers that it is aware of and investigating an issue that may result in "pink squares or pixels" appearing on displays connected to an M1 Mac mini. Image via Twitter user @FatihVidyograf This issue has been reported by users across the Apple Support Communities, MacRumors Forums, and Reddit since the M1 Mac mini...
Top Stories 47 Feature

Top Stories: More iOS 14.5 Beta Changes, iPhone 13 Rumors, Apple Watch Charging Issue Fixed

Saturday February 20, 2021 6:00 am PST by
Apple is continuing to tweak things during the iOS 14.5 beta testing period, and it looks like there will be some nice changes coming in the update when it's released to the public in a month or so. This week also saw the release of a watchOS bug fix update for Series 5 and Series SE owners, addressing a serious issue where their watches may not charge after entering Power Reserve mode,...
google chrome macos big sur

Chrome Used 10X More RAM Than Safari on macOS Big Sur in Recent Test [Updated]

Saturday February 20, 2021 12:52 pm PST by
Under normal and lightweight web browsing, Google Chrome uses 10x more RAM than Safari on macOS Big Sur, according to a test conducted by Flotato creator Morten Just (via iMore). In a blog post, Just outlines that he put both browsers to the test in two scenarios on the latest version of macOS. The first test was conducted on a virtual machine, and the second on a 2019 16-inch MacBook Pro...
m1 mac mini

M1 Mac Users Report Excessive SSD Wear

Tuesday February 23, 2021 7:07 am PST by
Over the past week, some M1 Mac users have been reporting alarming SSD health readings, suggesting that these devices are writing extraordinary amounts of data to their drives (via iMore). Across Twitter and the MacRumors forums, users are reporting that M1 Macs are experiencing extremely high drive writes over a short space of time. In what appear to be the most severe cases, M1 Macs are sai...
maxresdefault

Revisiting Apple's MagSafe Leather Wallet After 3 Months of Usage

Saturday February 20, 2021 8:04 am PST by
Back in November when Apple's MagSafe-compatible Leather Wallet first launched, MacRumors videographer Dan took a look at the accessory and ended up disliking it because of the weak magnetic connection. Dan kept using the Leather Wallet despite its flaws, and after three months with the accessory, his opinion has changed and he wanted to share some new thoughts on it. Subscribe to the ...