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Apple Inc. Wins Holiday Smartphone Sales, But Older iPhones Top iPhone X

Flurry Analytics activation data shows Apple holding steady compared to 2016 holidays, but new iPhones were eclipsed by older models

iPhone X sales - Apple Inc. Wins Holiday Smartphone Sales, But Older iPhones Top iPhone X

Source: Flurry Analytics

Apple Inc. (NASDAQ:AAPL) has been closing out 2017 with disappointing reports about iPhone X sales, resulting in AAPL stock taking a hit.

New data suggests the company has something to be happy about: Apple mobile devices were the most popular when it comes to gift-giving. However, in keeping with the theme the company has been facing, data suggests both the iPhone 7 and iPhone 6 topped iPhone X sales.

IPhone Sales Put Apple on Tops for Gifting

Flurry Analytics — owned by Verizon Communication Inc.’s (NYSE:VZ) Yaho o– tracks worldwide mobile device activations. As it did last year, the company released its data for new mobile device activations in the week leading up to Christmas.

This data gives a good indication of which mobile devices (primarily smartphones with some tablets thrown in the mix) made the most popular gifts during the holidays.

When it comes to smartphone sales, Flurry’s data says two companies dominated the 2017 holiday season: Apple and Samsung. Apple was tops with 44% of new mobile device activations (exactly where it was last year), while Samsung made some gains to hit 26%.

However, iPhone X sales were not the driving force behind Apple’s success. And neither was the iPhone 8. Flurry’s numbers point to the iPhone 7 as topping holiday iPhone sales, accounting for 15.1% of Apple’s activations.

Next up was 2014’s iPhone 6. Then the iPhone X. The iPhone 7 Plus and iPhone 6s both beat out the iPhone 8.

More Fuel for the iPhone X Sales Fire?

Apple was making headlines yesterday, with fears of slowing iPhone X sales spooking investors and knocking AAPL stock down 2.5% to start off the day. The data released by Flurry Analytics suggests iPhone sales, in general, are holding their own, but feeds into the concerns about the iPhone X not being the hit Apple was expecting.

When the new flagship gets beat out by last year’s iPhone and a model that’s three years old, there’s something going on.

Availability does not appear to be the culprit. There were shortages of the iPhone X at launch, but by the end of November, Apple seemed to have that under control. During the week leading up to Christmas, the new iPhone was available and in stock at most U.S. Apple Stores. And supply has never been an issue with the iPhone 8 — Apple’s other release for 2017.

The Flurry data suggests that price sensitivity is at play, and given that its data is not just the U.S., but also the rest of the world (where disposable income is typically lower), that factor becomes even more important. The price of the iPhone X, which starts at $999 has always been a concern, with fears that that sticker shock would keep consumers away.

The fact that iPhone X activations were topped by both the iPhone 7 and iPhone 6 suggests that globally, price is a factor. Consumer demand for a new iPhone is there, but the willingness to pay a big premium for a few extra features is not. That apparent price sensitivity doesn’t bode well for iPhone X sales and reinforces the reports from yesterday that Apple is cutting its orders for the new flagship smartphone by up to 40%.

All of this information suggests that Apple’s bet on the record-high priced iPhone X may not pay off as planned. Instead of an “upgrade supercycle” that drives AAPL stock to new record highs, the iPhone X sales seem to be on track to be much more modest. And the backup iPhone 8 doesn’t exactly appear to be killing it either.

The Flurry Analytics data shows that at least for the holiday gift window, iPhone sales overall were holding steady but people were more interested in saving money than in getting Apple’s latest and greatest. 

With consumers continuing to vote with their wallets, Apple’s challenge for 2018 is becoming clear: design a new iPhone with more compelling new features than Animoji, and offer a version that’s priced for the mass market.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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