iPhone X Forecasts Are An Early Christmas Present For Apple

By Mark Sullivan

Apple’s financial results for the September-ending quarter are important, but not as important as the success of the launch of its new iPhone X phone in the current holiday quarter.


Apple’s numbers and executive comments Wednesday point to good news on both counts, however. The company reported a better-than-expected September-ending quarter with 12% revenue growth, and it also forecast a record revenue in the holiday quarter, between $84 and $87 billion.

That aggressive revenue forecast suggests very strong sales of Apple’s new iPhone X smartphone. The better-than-expected earnings and its forecast sent the company’s shares to record levels in late trading, and toward a $900 billion market capitalization.

The forecast comes amid worries over Apple’s ability to meet demand for the new device. For weeks, reports have come in saying that suppliers are having trouble pumping large numbers of the technologically complex “X” off the assembly line. This, it’s said, is caused by low yield rates of the lasers that do the X’s facial recognition function.

Asked about the iPhone X supply-and-demand issues, chief executive Tim Cook was vague during a call with analysts Wednesday. “The ramp of the iPhone X is going well and we have been able to increase week by week in what we’re outputting,” Cook said, suggesting, at least, that the yield situation is improving. “We are working to get the phones into the hands of buyers as soon as possible,” he said.

The iPhone X goes on sale in stores this Friday. Starting at $999, it’s the most expensive iPhone ever.

Aside from the worries about iPhone X supply levels, the company also has had to worry about the possibility that the fancy new iPhone X would enrapture consumers so much that nobody would want to buy the other phones the company launched this fall–the iPhone 8 and iPhone 8 Plus.


The earnings report suggests that so far Apple has managed to balance interest in the two phones nicely.

“Apple managed to thread the needle on iPhone sales between the giant interest in the iPhone X and what the company had to ship, which was iPhone 7 and 8,” Patrick Moorhead, of Moor Insights & Strategy, wrote  in an email to Fast Company. “And the company sold those phones at a constant ASP, too, indicating the lack of deep discounts.”

Cook said that after the iPhone 8 and iPhone 8 Plus went on sale during the last part of September, the phones quickly become the best-selling iPhones and remained that way for the remainder of the quarter.

There will likely still be plenty of buyers left to trade up to the iPhone X in the next few months, even with the new phone’s high price tag. “We price according to the value we’re providing,” Cook told analysts Wednesday. “We’re not just trying to provide the most expensive device out there.”




Fast Company , Read Full Story