Little Change in iPhone 8 & Watch Lead Times Over Weekend
Friday morning (Sep 15) Apple started taking pre-orders for the iPhone 8 and 8 Plus. At around 11AM ET we spot checked availability of those phones in the U.S. At the time, Apple was quoting 1-2 week lead times for most configurations. On Sunday afternoon (Sep 17th) we took a closer look at the lead times and found little change from Friday. Our Sunday afternoon lead time checks in other countries quoted similar 1-2 weeks shipping expectations. See details below.
Comparing iPhone 8 & 8 Plus Lead Times to Past Launches. The pre-order lead times are playing out as we expected with similar to the lead times as the smaller size iPhone’s over the past three years, but shorter lead times than the larger Plus sizes. For the smaller screen sizes, last year we found that average iPhone 7 lead times of 1-2 weeks with five days to launch (same days to launch window as our checks today), which compares to 7-10 days for the iPhone 6 and iPhone 6S. We note the 6S had a slightly longer time between announcement and launch, thus more time to build inventory to handle initial demand. For the Plus sizes, last year we measured the iPhone 7 Plus lead times 5 days before launch at 2-3 weeks on average compared to 3-4 weeks for both the iPhone 6 Plus and iPhone 6S Plus. Separately, we expect the iPhone 8 & 8 Plus will account for about 25-30% of iPhone units over the next year and expect the iPhone X to account for about 20% of units, so the demand for the next iPhone cycle is more or less equally split between two models which would likely lowers lead times.
Watch + Cellular Lead Times. We did similar Watch + Cellular spot checks on Friday morning and noted little change on our detailed Sunday, Sep 17 checks. All models quoted 3-4 week lead times with the one exception (Silver Aluminum Case with Seashell Sport Loop which was 4-5 weeks). Apple Watch accounts for 3% of Apple’s overall sales, but we believe adding cellular (despite the $10 per month up data up charge) will add about 2% to Apple’s overall revenue growth rate for FY18. We’re modeling for 15% revenue growth in FY18, inline with the Street.