IPhone X pre-orders begin
Canadian wireless providers set to find out how badly fans want $1,319 device
Canadian wireless providers are about to find out just how badly Apple Inc. fans want the tenth-anniversary iPhone model.
Customers can order the iPhone X as of Friday, a week before Apple stores will hawk limited quantities to walk-in customers. Apple’s announcement would likely encourage people to arrive at stores early on Nov. 3, a move some tech bloggers characterize as a ploy to generate photos of long line-ups as proof of the product’s appeal.
The pre-order comes amid questions over the iPhone X’s supply and whether consumers will be convinced to upgrade to the pricey device.
Despite being unveiled on the same day in September, the iPhone X is being released six weeks after the iPhone 8 and 8+.
The delay stems from manufacturing challenges related to the iPhone X’s face-recognition technology, according to Bloomberg.
Analysts expect only 2- to 3-million handsets will be available when the phone launches in dozens of countries. And they don’t think the supply problems will end during the busy holiday shopping quarter.
KGI Securities analyst Ming-Chi Kuo predicted Apple will only have between 25 million and 30 million to sell this quarter, down from his previous estimate of 40 million handsets, Bloomberg reported.
Analysts expected iPhone 8 and 8+ sales to be muted as consumers wait for the iPhone X.
But it’s not clear how many Canadians will be able to upgrade to the iPhone X given the reported supply constraints — and that’s if they’re willing to spend $1,319 outright or $600 for a 64 GB model on a two-year contract starting at $95 per month with one of the Big Three carriers.
“A couple things to bear in mind is that the iPhone X price point is about 75 per cent higher than the iPhone 7, so it’s a very expensive device,” Rogers Communications Inc. CEO Joe Natale said on a conference call with analysts last week.
“Inventory is a question mark in terms of what we will get,” Natale said, adding the financial guidance balances inventory, appetite for the device and the price point.
Still, Natale said there’s a lot of anticipation for the iPhone X compared to the iPhone 8, which he said was more incremental than transformational in terms of product evolution.
“What we’re seeing is sort of, I would say a more anaemic appetite for the iPhone 8 right now,” he said.
He expects the new slate of iPhones to affect results, but that might not happen until supply problems are solved next year.
RBC Capital Markets analyst Drew McReynolds expects the higher prices won’t deter consumers, given the pent up demand from the cohorts that bought the iPhone 6 in 2014 and the iPhone 6S in 2015.
“With North American handset upgrades currently below historical trends, we expect a reasonably robust iPhone upgrade cycle beginning in Q4/17 and into 2018,” McReynolds noted to clients last week.
Despite the high price, Desjardins analyst Maher Yaghi expects the iPhone launch won’t have much of a financial impact on operators’ margins since they appear to be passing a large chunk of the cost onto consumers.
“This should be the case despite the fact that initial reviews suggest the phone could be relatively popular vs. previous launches, which could generate meaningful upfront costs for operators.”