As impressive as the iPhone X, you cannot ignore that its $999 price tag was tough on both consumers and analysts who wanted to be optimistic over the skyward smartphone sales.
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The analyst team at Nomura has joined forces with Longbow Research and Bernstein in expressing why the iPhone X sales have been so lackluster. One of them is definitely the price tag and when you already have a previous-generation iPhone that is working not just perfectly but will be entitled to receive software updates for a few more years, lots of people might not want to spend a massive sum of money on just a smartphone.
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“One factor that is likely suppressing the smartphone market is price. We see several indications the market elasticity is falling. Obviously, Apple’s iPhone ASPs have climbed from $645 in FY16; we model $742 in FY18. We do not believe it is coincidence that the highest end of the product portfolio, the X, is the model that is flagging.”
As a result, they have also reduced the number of sales that iPhone units will be able to garner for the 2018 period.
“We thus lower our FY2018 iPhone units from 226mn to 221mn, below consensus of 224mn and our EPS from $11.56 to $11.40, also below consensus of $11.48. We maintain our $175 target and Neutral rating.”
While it is easier for U.S.-based customers to purchase an iPhone X thanks to being able to pay in monthly bills, the majority of the countries are not entitled to such a flexibility. Customers will have to pay a massive sum upfront, which is often higher than the original $999 retail price.
Additionally, not being able to receive after-sales services even after paying such a massive amount means that lots of buyers will be skeptical about its longevity.
Apple is planning to introduce three iPhone models this year which includes a 5.8-inch iPhone X successor, a 6.1-inch LCD iPhone which will be more affordable than the iPhone X, and a 6.5-inch iPhone X Plus which would be 25 percent bigger than the $999 version that is being sold right now.
Source: Business Insider
