Friday, October 27, 2017

Apple Leak Reveals iPhone X Launch 'Catastrophe'

iPhone X orders start tomorrow and things are not looking good. Following two high profile reports stating Apple AAPL +3.27% is facing unparalleled stock shortages, a new industry report has now delivered the most damning verdict yet…

Popular UK site TechRadar brings the bad news. Speaking to a source at one of the country’s largest phone retailers, TechRadar quotes them describing the lack of iPhone X stock as “chronic” and stating availability worldwide after the launch will be a “catastrophe”.

iPhone X has captured the imagination, but can you buy one?

"Our advice would be to pre-order as soon as possible if they want the new iPhone,” the source explains. “It is highly likely to sell out very quickly and we know that some retailers and networks have only been assigned a tiny number of the handsets. A tiny number.”

Compounding this the source says “it'll be into January or February before there is enough stock to go round”. This would mean Apple will miss out on the lucrative festive period, traditionally its biggest months of the year.

As frustrating as this new report is, it does tie in with similar statements for acclaimed KGI Securities analyst Ming Chi-Kuo and The Nikkei, the world’s largest financial newspaper.

The former claims specific iPhone X components are what held up production with the brakes not coming off until the first quarter of 2018. Meanwhile The Nikkei says the production problems Kuo describes were responsible for Apple having to cut iPhone X production in 2017 by 40 million to 20 million, a massive 50%.

So how much iPhone X stock can you expect on launch day? Brace yourself.

Apple new iPhone X, iPhone 8 and iPhone 8 Plus are facing very different sales problems

With pre-orders opening tomorrow (October 27th), there are expected to be just 2-3M units globally on launch day (November 3rd). While Apple claims some very limited stock will be available in select stores for walk-ins (read: queue-ups), the vast majority of this number will go to those already with reservations.

Given Apple’s opening weekend iPhone sales record stands at 13 million, 2-3M for arguably the most anticipated new iPhone in generations won’t be anywhere close to enough. Neither is 20M for the whole of November and December.

Apple will find this all the more frustrating since demand for the in-stock iPhone 8 and iPhone 8 Plus has been tepid with Roger’s CEO Joe Natale earlier this week saying there was an “anemic appetite” for them from customers on its network.

And yet long term Apple will be fine. In fact Kuo is predicting an iPhone sales ‘super cycle’ in 2018 once stock improves. As such the reality is those most likely to find the current situation “chronic” and a “catastrophe” will actually be aspiring owners desperate to get the iPhone X under their Christmas tree.

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