Apple’s Big Problem? Apparently the iPhone X Is ‘Too Popular’

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Apple has a problem, according to one analyst. The iPhone is too popular and people can’t seem to stop buying it..

Why is that a problem? Because, as New Street Research analyst Pierre Ferragu contends, people who buy an iPhone X now are less likely to upgrade when Apple unveils its 2018 lineup of handsets.

“We expect a material disappointment in 2019,” Ferragu told CNBC. “The iPhone X has been very successful and well received by consumers. It has been so successful, that we think it has brought forward demand.”

The analyst added that it could create a “vacuum in sales” — and even the introduction of an entry-level LCD iPhone won’t convince consumers who already have an iPhone X. As such, Ferragu downgraded AAPL stock to a sell before setting a price target of $165.

It’s worth noting that market analysts have been wrong before. Since the iPhone X debuted, many market watchers have sounded the alarm due to supposedly mediocre demand for the iPhone X.

As Apple’s earnings calls prove, that wasn’t the case. Apple’s second-quarter earnings beat analyst estimates and launched the company past its $1 trillion market valuation milestone.

Even though he’s taking the contrarian view, it’s not outside of the realm of possibility for Ferragu’s prediction to be similarly off-base.

Of course, the entire smartphone market is seeing saturation with fewer consumers rushing out to buy the latest models. That hurts all handset manufacturers, not just Apple.

But there’s something that the analyst may be missing here. Customers who have purchased an iPhone X are obviously those who are looking at a premium-tier handset — a sector dominated by Apple, Samsung and Google.

Apple is rumored to drop iPhone prices by about $100 this year. That means the iPhone X successor could start at $899, while the larger iPhone X Plus would overtake the iPhone X’s price tier at $999.

Iphone X Plus
Martin Hajek

Larger smartphones are incredibly popular in China, the largest and one of the most critical markets for Apple and all smartphone OEMs.

Due to that, well-respected and oft-accurate TF Securities analyst Ming-Chi Kuo forecasts that the iPhone X Plus could give a huge boost to Apple’s competitiveness in China.

More than that, the Cupertino tech giant is expected to debut a lower-cost 6.1-inch iPhone with an LCD display. It’ll pack premium features like Face ID and wireless charging, but could retail as low as $599, according to some price predictions.

That would put the 6.1-inch LCD iPhone in more direct competition with mid-range smartphone manufacturers who dominate in China. Market watchers are already expecting it to sell like hot cakes.

In other words, Apple wouldn’t be competing with itself in these instances. Its new lineup could attract Android stalwarts with devices from the likes of Huawei or OnePlus — a market that it has, arguably, yet to tap.

Is the iPhone X popular? Probably. But claiming that that’s bad for Apple just doesn’t really pan out.

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