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iPhone X debut: Should Apple worry as model 7 outsells 8 in US?

While iPhone 8 starts from $699 in the US, iPhone 7 is retailing from $549 after a price cut

Reuters 

iphone
(L-R) iPhone 8 Plus, iPhone X and iPhone 8 models are displayed during an Apple launch event in Cupertino (Photo: Reuters)

Inc’s older 7 models are outselling the recently launched 8 ahead of the early November debut of the premium X, broker KeyBanc Capital Markets said, citing carrier store surveys.

Traditionally, new editions of the have sold quickly as fans queue for the latest upgrade, but early surveys have added to chatter that the 8 is not proving as popular as its predecessors.

wireless carrier AT&T said last week its third-quarter postpaid handset upgrades were fewer by nearly 900,000 from a year ago, and brokerage Jefferies attributed it to weak 8 demand.

“Many respondents indicated that a meaningful portion of customers are buying 7 in lieu of the new 8, given the lack of significant enhancements in the new phone,” KeyBanc analyst John Vinh wrote in a client note.

Vinh also said feedback from stores indicated that customers were waiting to purchase the X or to compare the X with other models before buying the 8.

last month introduced the 8 and 8 Plus, which resemble the 7 but have a glass back for wireless charging. While 8 starts from $699 in the United States, 7 is retailing from $549 after a price cut.

The X, a glass and stainless steel device with an edge-to-edge display, will start shipping from November 3. The 10th-anniversary is priced from $999 - Apple’s most expensive mobile till date.

One investor in Apple’s shares played down any concern around a dip in sales of the 7 or 8, given the much-anticipated debut of X.

“Worrying about any small down-tick in margins from the sale of the 7 or 8 is a wrong-headed way to look at it as X is really the flagship device where we’re going to see a strong upgrade cycle,” said Jason Ware, chief investment officer of Albion Financial Group.

Another reason for the slow uptick of the 8 could be the modest promotion by carriers.

“While carriers continue to offer promotions for the new 8, they have been much more modest compared to the 7 launch last year,” Vinh wrote.

Separately, KeyBanc’s Andy Hargreaves upgraded the stock to “overweight” from “sector weight” and set a price target of $187.

declined to comment.

The company’s shares were up 1.51 percent at $159.36 around midday in New York.

First Published: Tue, October 17 2017. 09:07 IST
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