The iPhone X is not doing as well as expected in China, but Apple’s larger iPhone models expected to debut this year could be the key to making up for that lackluster demand.
Research firm KGI Securities has revised its shipment forecast for the iPhone X to 18 million units and 13 million units in the first and second quarter of 2018, respectively.
That’s lower than the expected 20 to 30 million units originally predicted for the first quarter, and 15 to 20 million for the second, analyst Ming-Chi Kuo wrote in a research note this week.
As such, Kuo expects the iPhone X to reach its end-of-life around the middle of this year. He added that total life cycle shipments would be about 62 million units — down from KGI’s original forecast of 80 million.
KGI gave two reasons for the weaker-than-expected iPhone X demand in China.
- First, consumers have shown that they’re generally willing to wait a bit longer before replacing their current devices. In the last year, many Chinese smartphone owners waited much longer before upgrading.
- Second, Chinese consumers like smartphones with larger displays. As Kuo notes, the iPhone X’s “sensor notch” is incompatible with many popular Chinese iOS apps. As such, the actual usable space on the device is less than the 5.5-inch iPhone 8 Plus model. That fact, along with the iPhone X’s high price point, may have undermined replacement demand.
But that, KGI notes, is where the iPhone X Plus comes in.
Kuo believes that Apple’s 2018 iPhone lineup will give a huge boost to Apple’s competitiveness in China in the second half of the year — in fact, Kuo expects that this is when that rumored “upgrade super cycle” will actually kick in.
And that’s largely due to current rumors of what the 2018 iPhone lineup will look like. Kuo previously predicted that the Cupertino tech giant will debut three devices this year:
- Aa 6.1-inch LCD model.
- An iPhone X successor.
- And the long-rumored iPhone X Plus.
That latter device is expected to apply the iPhone X’s “all-screen” design to a larger bodied phone akin to current iPhone 8 Plus models. The device would have an impressively large 6.5-inch OLED display, as well as Apple’s new TrueDepth Camera and Face ID.
Kuo added that the 6.1-inch LCD iPhone on the books for this year is also likely to “make it easier for users worldwide to own a 3D sensing and full-screen iPhone which offers an innovative user experience.” KGI Securities predicts that the device, which will sport Face ID and an edge-to-edge display, will retail between $650 and $750.
As a result of these factors, KGI Securities is maintaining a positive outlook for the iPhone ecosystem and supply chain in the latter half of the year. Kuo believes iPhone shipments will grow 5 to 10 percent year-over-year in 2018. And he expects the iPhone X Plus and the 6.1-inch LCD iPhone to boost Apple’s market share in the critical region of China
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