You can officially walk into a store and buy Apple’s (NASDAQ:AAPL) new iPhone XS and iPhone XS Max starting on September 21. However, iPhone pre-orders kicked off last Friday — a day AAPL stock was down just over 1%. The numbers from this weekend give a good indication of whether Apple is going to be setting records, or having a repeat of last year. The company no longer releases official stats, but based on what what we’ve been able to put together from current delivery times for pre-orders and analyst reports, it looks like AAPL might have a hit on it’s hands… the Apple Watch Series 4.
Complicating all this is the misstep with the iPhone XR. In a reversal of Apple’s stumble in 2017 that saw a delayed launch of the iPhone X, this year the most affordable new iPhone is delayed due to production issues. So once again, iPhone pre-orders data will need an asterisk.
Analyst: iPhone XS Seeing Lackluster Demand
On Sunday evening, MacRumors reported on a research note from well-known Apple analyst Ming-Chi Kuo. While AAPL itself has not released official numbers for iPhone pre-orders, Kuo thinks he has a handle on how things went over the weekend. According to Kuo, the iPhone XS saw lower than expected demand, while the iPhone XS Max was selling numbers in-line with expectations. The big surprise was the Apple Watch Series 4, which Kuo says is selling better than expected.
On Friday, BGR reported that both the $999+ iPhone XS and $1099+ iPhone XS Max were quickly selling out when pre-orders opened.
However, a quick check this morning on the Apple site shows that all capacities and colors of both the iPhone XS and iPhone XS Max have shipping times of 1-2 weeks. That means someone who pre-orders today could have their new iPhone of choice just a few days after the iPhone pre-sales from last Friday arrive. To be clear, this is better than the situation with iPhone 8 pre-orders last year. But it’s also no-where near what happened with the iPhone X, where shipping dates quickly stretched to five weeks or more.
However, muddying the waters was the apparent shortage of iPhone X units due to production issues and a staggered launch. We’re seeing the same issue this year, but reversed, with the most expensive models available now and the affordable iPhone XR not available until October.
At this point, Ming-Chi Kuo is dropping his prediction for iPhone XS sales, putting the model at only 10-15% of the 2018 lineup. He maintains the iPhone XS Max will make up 25-30% of the 2018 sales, and now feels the iPhone XR will take a bigger chunk, coming in at 55-60% of the 2018 iPhone sales.
We’ll have to wait until October 19 to get the complete picture on the 2018 iPhone pre-orders situation. In the meantime, the new iPhones’ impact on AAPL stock is likely to be a little volatile.
Apple Watch Series 4 Doing Better Than Expected
While overall iPhone pre-orders will remain a mystery for another month, the Apple Watch Series 4 is showing a strong performance. When I checked the website this morning, pre-orders are now showing four weeks before shipping. The apparent demand is good news for Apple and AAPL stock, but not great for competitors like Fitbit (NYSE:FIT).
With the first weekend of iPhone pre-orders behind us, the next big metric AAPL investors will be watching is the lines outside Apple Stores on Friday. Will the new iPhones sell out? Stay tuned for that news.
Just like 2017, though, there’s an asterisk beside any numbers because of the delayed iPhone XR. In particular, are iPhone XS sales slower than expected because people are waiting to buy the less expensive iPhone XR? Or will overall demand for new iPhones be down? The answer is a big deal in terms of Apple revenue and AAPL stock performance, but it’s doubtful that we’ll know with any certainty just how well things are going with the 2018 iPhones until Apple releases its Q1 2019 earnings…
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
