Apple Inc. (NASDAQ:AAPL) may have boosted its iPhone revenue last quarter thanks to the big rise in average sale price delivered by its $999+ flagship. But it’s no secret that iPhone X sales are lower than expected, and that’s been a negative for AAPL stock.
Midway through the current iPhone sales cycle, rumors are flying that Apple may turn to one of the oldest tricks in its book to try boosting those numbers: new colors. If the rumors are correct, we may see a Blush Gold iPhone X, and possible even a Product Red version before long.
Sluggish iPhone X Sales Not Helping AAPL Stock
In the midst of a general tech sell-off, AAPL stock lost nearly 7% last week.
Not helping the situation is the ongoing issue of sluggish iPhone X sales. In the lead up to the release of the 10th anniversary iPhone, there were expectations of record sales. Instead, reception was relatively tepid and the hoped for “upgrade super-cycle” turned into a Q1 earnings report where iPhone sales dropped year-over-year.
The $999+ that Apple charges for the iPhone X helped to boost revenue despite lower unit sales –delivering record high ASP numbers — but that doesn’t change the fact that the company sold far fewer than it expected to.
In fact, Samsung reportedly cut production of OLED panels for the Apple’s flagship by 60% compared to what Apple had originally ordered based on expected iPhone X sales.
Rumor: Apple to Release Blush Gold iPhone X
When the iPhone X launched, Apple offered two color options: Space Gray and Silver. MacRumors is tracking reported sightings of an iPhone X in Blush Gold, a hue very similar to the popular Rose Gold color choice offered for many current Apple products, including the MacBook, iPad Pro, iPhone SE and Apple Watch.
According to MacRumors, a Japanese blog has photos of the Blush Gold iPhone X, as does another noted Apple product leaker. It’s also worth noting that just about a year ago, Apple chose to release a Product Red version of the iPhone 7 –in a tactic aimed at boosting mid-cycle sales. It’s possible we could also see a Product Red iPhone X in the mix.
Switching up colors of existing products to boost sales is a strategy Apple has used repeatedly, from the iMac to the iPod and last year’s Product Red iPhone 7. As a way to potentially boost iPhone X sales without cutting prices or tweaking the hardware, it’s Apple’s go-to move.
Will the Tactic Work This Time?
Historically, Apple has been successful in using color options to boost product sales. But this time, new colors may not be enough to cause more than a minor spike in iPhone X sales.
The competition is tougher than ever, and two of the phones Apple’s flagship is going up against –Samsung’s Galaxy S9 and Alphabet Inc’s (NASDAQ:GOOGL) Google Pixel 2 — are significantly cheaper. If consumers are choosing to skip the iPhone X in favor of options costing hundreds of dollars less (including Apple’s own iPhone 8), having a few additional color options may not do much to change their minds.
As for China — the country Apple originally targeted with gold options — smartphone sales in that market have declined at a rate much higher than the global average.
Apple remains a leader in the premium segment there, but the iPhone X is priced out of reach of most Chinese consumers; having a Blush Gold option may make it more desirable, but it’s not going to change the affordability issue. There’s also the looming possibility of a trade war with China, in which case Chinese smartphone buyers may shun the American products.
At the end of the day, if Apple does choose to introduce a new color or two, it might boost iPhone X sales, and it might not. But if nothing else, it’s a low cost form of insurance to help prevent sales from sliding further in the doldrum days leading up to the 2018 iPhone launches this fall.
More quarters of sliding iPhone numbers is the last thing AAPL stock needs right now…
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
