iPhone X Off to a Fast Start
Lines for iPhone X more than double what we expected. In keeping with a tradition stretching back to 2008, we counted lines across the country this morning; this time in New York, Chicago, and several stores in Minneapolis. Lines counts exceeded our expectations by more than 2x, signaling strong demand for the iPhone X.
Longest lines since iPhone 6. The iPhone X line counts exceeded lines for the previous 3 iPhone releases, including lines 57% longer than the iPhone 7 lines. It is also worth noting that the new Michigan Avenue store in Chicago drew a crowd of 275.
Puts and Takes in iPhone Line Counts:
- iPhone X is a Redesign (+). iPhone X represents the first new iPhone hardware design since the iPhone 6 (2014), boosting excitement to wait in line for an iPhone X.
- Pre-orders are more popular (-). Consumers are getting more savvy with Apple’s iPhone pre-order option, and Apple executes it flawlessly, reducing the need to wait in line for a new iPhone.
- Apple Publicly Confirmed In-Store Units but Suggested People “Arrive Early” (+). Apple’s press release earlier in the week confirmed that they’d have in-store stock, but encouraged customers to “arrive early,” undoubtedly increasing the likelihood of an early adopter waiting in line.
- Online Lead Times are Long (+). With online lead times now stretching into December, if consumers missed the pre-order, today might be their only chance to get an iPhone before the holidays, increasing the need to wait in line.
Higher iPhone X demand inches up our ASP estimates. Based on the long lines we saw this morning, we are recalibrating our FY18 iPhone mix. We are currently modeling for 22% of iPhones sold in FY18 to be iPhone Xs. Today’s data suggests that number could be closer to 28%, which would bring our ASP for FY18 to $769 (up from $740, +4%).
5th Avenue, New York (photo: Gene Munster)
Michigan Avenue, Chicago (photo: Steve Van Sloun)
Uptown, Minneapolis (photo: Will Thompson)
Disclaimer: We actively write about the themes in which we invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.