First Batch of iPhone Xs Is Reportedly Just 46,500 Units

, First Batch of iPhone Xs Is Reportedly Just 46,500 Units, #Bizwhiznetwork.com Innovation ΛI

From the moment Apple unveiled the iPhone X, there’s been concern over whether demand for the new device would pull sales away from the iPhone 8/8 Plus, and leave Apple scrambling to fill orders with what was initially intended as a halo product. We saw a similar situation with the iPhone 5s and 5c, when Apple launched the budget device expecting to gain market share, only to see a majority of its customers stampede towards the iPhone 5s instead.

This is, on the one hand, a ridiculously good problem to have, and I imagine certain executives at Apple are crowing all the way to the bank. But a lack-of-availability issue could blow up in Apple’s face if the company isn’t careful. A recent story from DigiTimes implies this may be the case, with an estimated first shipment of Apple iPhone Xs only recently departing Foxconn with a measly 46,500 devices between them.

Even with Foxconn reportedly stepping up its production goal from 100,000 to 400,000 per week, there’s only a bit more than two weeks left until the iPhone X launch. Four hundred thousand per week gives Apple roughly 4 million phones by the end of the year. That’s not tiny, but it’s not much compared with Apple’s typical quarterly shipments, either. Apple’s holiday sales (Q1 of the company’s fiscal quarter) have been in the 75 million range in the last few years, and ~50 million for several years before that. Four million phones is basically pocket change, even if the iPhone X carries a higher profit margin than the iPhone 8 and 8 Plus.

Apple-iPhone-iPad-Macs-sales-2016

The worst-case scenario for Apple would be for customers to convert their interest in a high-end phone from Apple to Samsung if they can’t get an iPhone X (less likely), or to simply sit out the initial rush altogether. The closer we get to the launch of a new phone, the more likely people are to sit back and wait to see what features Apple will introduce with either the iPhone 9 (if it keeps its old numbering standard) or the iPhone 11 (if it leapfrogs the X). It’s actually a smart move to wait: Why spend $1,000 on an anniversary phone when the technologies it debuts are likely to come to cheaper devices in less than a year?

Ironically, Apple’s first-mover status is likely to bite it here. Normally, Apple could try to keep certain features as standard to only the iPhone X, in much the same way that it once offered optical image stabilization only on its larger phones. But the larger cell phone market has always taken certain cues from Apple, which is why we see headphone jacks vanishing from devices only once Apple took the plunge first (yes, in other ways, Apple is playing catch-up with the iPhone X, but that’s orthogonal to the point). Once Apple starts talking about its new Face ID camera or even-smaller bezels, other companies will start adding those features as well. The iPhone X may have made headlines on account of being unique, but if the mobile market has shown us anything, it’s that uniqueness doesn’t last.

Apple will bring at least some iPhone X features to the larger iPhone market; the only question is when. It’s somewhat ironic the company’s most iconic device since the original iPhone could cause it no shortage of sales issues, especially if production remains low. Right now, the Face ID TrueDepth camera is being touted as the problem, though we’ve also seen slowdowns attributed to the phone’s OLED screen. Preorders for the device begin Oct 27. Watch for skyrocketing shipment times–they’ll be the surest sign Apple is unable to meet demand from pre-existing supply.

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