A few months ago, there was an assumption that Apple Inc. (NASDAQ:AAPL) would be enjoying an October of record-smashing iPhone sales. AAPL stock hit new highs at the start of September in anticipation of a super upgrade cycle, but things haven’t quite worked out that way.
Apple chose a staggered release, with the iPhone X not launching until the start of November amid rumors of part shortages. Now a report suggests last year’s iPhone 7 is outpacing iPhone 8 sales in the U.S.
Are the wheels falling off the iPhone upgrade bus?
Report: Carriers Say iPhone 8 Sales Are Weak
There were signs that this was not going to be the smash Apple quarter investors were hoping for right from the time of the September iPhone event. Reaction to the new iPhone 8 was muted — it looked virtually identical to the iPhone 7 (and iPhone 6 and iPhone 6s). The back was glass instead of aluminum, the camera is improved and it supports wireless charging, but there were fears it was not a compelling upgrade.
The appearance of slow iPhone 8 sales at launch, with line-ups at Apple stores smaller than usual and plentiful online stock availability, led to a slide in AAPL stock.
Apple has declined to release actual sales numbers, but a report from Reuters suggests the iPhone 8 may be doing even worse than we’d thought. A survey of carriers by KeyBanc Capital Markets found that in U.S. stores, last year’s iPhone 7 is beating iPhone 8 sales. Why? According to Keybanc’s analyst: “Many respondents indicated that a meaningful portion of customers are buying iPhone 7 in lieu of the new iPhone 8, given the lack of significant enhancements in the new phone.”
Also noted as factors were the $150 price difference between the now-discounted iPhone 7 and the iPhone 8, and “modest” carrier iPhone 8 promotions.
There’s also the iPhone X — and that’s where a worrisome story has the potential to turn into good news for AAPL stock.