Apple might be facing heat over the future sustainability of its iPhone business with reports saying the company has slashed production for upcoming quarters, but it looks like the picture is not so bleak.
According to a new report by Consumer Intelligence Research Partners (CIPR), the new iPhones are in fact getting more Android users to switch, with the iPhone XR driving much of this change. The reason for this appears to be that the iPhone XR is priced the lowest among the three 2018 models, and the features are attracting Android users.
“It appears that iPhone XR did serve to attract current Android users,”, said Mike Levin, CIRP Partner and Co-Founder. “Of course, Apple doesn’t just state plainly its launch strategy. But, based on the pricing and features, we can infer that Apple positioned iPhone XR to appeal to potential operating systems switchers from Android.”
However, this report is based on a survey of 165 US Apple customers that purchased an iPhone in the US in the 30 days after the iPhone XR launch on October 26, 2018. The data is not reflective of what the trends might look like in other countries or even the larger US picture, given the sample size.
CIPR’s report says that for the 30-day period following the launch of the iPhone XR in October, it accounted for 32% of total US iPhone sales. The bigger and more expensive iPhone XS and iPhone XS Max variants have accounted for 35 per cent of sales in the US, notes the research firm.
“Based on the initial sales, iPhone XR took the same share of iPhone sales as earlier models in their first month on the market. Of course, comparisons are difficult, because of how Apple sequenced new model launches in the past two years. Last year, Apple launched the evolutionary iPhone 8 and 8 Plus first. This year, Apple launched the more expensive models earlier, presumably trying to catch early demand from the most loyal customers,” Josh Lowitz, CIRP Partner and CoFounder said.
The number also show that 32% share for the iPhone XR is better than the 30 per cent share for the more expensive iPhone X in a similar timeframe from last year.
Apple too has insisted that the iPhone XR is the best-selling model. Apple’s vice president of product marketing Greg Joswiak had told Reuters that the $799 iPhone XR is the company’s “most mainstream product and our most popular iPhone.”
The firm’s report says that among these iPhone buyers, 82% upgraded from an iPhone, while 16% upgraded from an Android phone. In November 2017, when the original iPhone X launched, around 86% upgraded from an iPhone, and 11% upgraded from Android.
While the iPhone XR might have done well in the US, the device has not really driven sales for Apple like analysts had expected. Earlier this month, well known Apple analyst Ming-Chi Kuo of TF International Securities had said that the demand for the iPhone XR was weak in note to investors.
According to AppleInsider, which reported on this Kuo said the iPhone sales in the first quarter of 2019 would be between 38 million and 42 million units, which was a reduction of around 8 to 12 million in the same period for 2018.
Kuo’s earlier forecast was 47 million and 52 million units for the iPhone in 2019 first quarter. The reason for this is the lower than expected demand of iPhone XR, which is now at 15 to 20 million units, compared to the earlier one of 20-25 million.