iPhone X has helped Apple to achieve a revenue super-cycle instead of a volume super-cycle. The cumulative shipments for iPhone X reached 63 Million units by end of Aug 2018 lower than iPhone 6 for the similar period since launch but on track to be the most successful revenue and profit generating iPhone ever, according to the latest study released by Counterpoint Research.
Cumulative shipments of iPhone X reached 63 million units within ten months of its launch ending August 2018. By comparison, during the iPhone 6 Super Cycle, Apple took only six months to achieve similar volume, post-2014 launch. iPhone 6 shipped 30 million more units than iPhone X during its first 10 months of sales, so iPhone X missed the “volume Super Cycle”.
However, iPhone X which drove a completely radical new design language helped Apple to command a significantly higher Average Selling Price (ASP) at a point when the overall smartphone market was beginning to saturate. So, while the fabled volume super-cycle has not materialized, Apple has actually delivered a revenue super-cycle, posting record iPhone revenues and Average Selling Prices (ASPs) since the iPhone X launch. Both iPhone 6 and iPhone X generated almost similar revenues of USD 62 Billion across a similar period (first 10 months). iPhone X is therefore also a factor in Apple becoming the first trillion-dollar company.
The iPhone X has been well received in the US market with demand reaching an all-time high during the initial months of launch. It was even the #1 best selling model in many developed markets for the initial couple of quarters. However, demand in China only picked-up later, after the New Year, thanks to promotions and offers. Demand for the expensive iPhone X was modest in most of the emerging markets where older-generation iPhones remain popular. iPhone X shipments have been skewed towards traditionally stronger iPhone markets like USA, Japan, China, which contributed to almost two-thirds of the total iPhone X shipments.
In a consumer survey by Counterpoint at the launch of iPhone X, Chinese iPhone users expressed strong purchase intentions towards the iPhone X (see here), but low among Android users. However, in markets outside China, Apple did quite well in spite of higher price-tag iPhone X which remained popular across developed markets like the USA, Japan and parts of Western Europe. So while iPhone X didn’t help Apple grow its user base but handsomely contributed with dollars to top line, bottom line and market cap. It’s hard to deem iPhone X as a failure.
Going forward, Counterpoint predicts Apple to command even higher average selling price (ASP) with the rumoured three new iPhone launches this time.