When Apple first launched the original iPhone back in 2007, every rival smartphone maker had the same cavalier response. In a nutshell, they believed iPhone was dead on arrival. A few short years later, the iPhone took over the smartphone business and left a string of dead industry giants in its wake. Ever since then, we’ve heard tale after tale of imminent “iPhone killers,” phones that would launch and finally end the iPhone’s reign of terror. Consumers wouldn’t care about the iPhone anymore, and attention would instead turn to one of these exciting new phones.
Most iPhone killers fizzled out as quickly as they appeared, like the Palm Pre and, most recently, the Essential phone. Others like the Motorola Droid sold pretty well and even stuck around for a few generations, but they didn’t come anywhere close to toppling the iPhone. In fact, they didn’t even put a dent in iPhone sales. But now, in 2017, there is finally a new smartphone that has had a real impact on iPhone sales. In fact, the world’s top analyst expects this new phone to have such a serious impact on iPhone sales that Apple will have to make massive adjustments to iPhone production because of it.
So, what is this iPhone killer that has finally managed to topple one of Apple’s iPhones? It’s… an iPhone.
KGI Securities analyst Ming-Chi Kuo is by far the most reliable source of information when it comes to Apple’s plans surrounding unreleased products. He has a number of sources in Apple’s supply chain, so he also often sheds light on Apple’s production plans in his research notes to clients.
We covered Kuo’s new note over the weekend, focusing on the idea that iPhone X demand appears to be far stronger than Apple had anticipated. In fact, it’s so strong that Apple will supposedly increase iPhone X production by between 35% and 45% next quarter, which is incredible when you consider how expensive the company’s new tenth-anniversary iPhone is.
But there’s more to Kuo’s latest report. It appears as though the iPhone X’s success is coming at the expense of the iPhone 8. And we’re not talking about a tiny impact here. According to the analyst’s latest note, Apple is expected to cut iPhone 8 production by between 50% and 60% from the December quarter to the March quarter because there’s hardly any demand since it all shifted to the iPhone X. So the only phone that has been able to put a real dent in iPhone demand is another iPhone.
Meanwhile, Kuo says iPhone 8 Plus sales have actually been slightly above expectations. In other words, Apple’s $1,000+ iPhone X has killed demand for the lowest-priced iPhone 8 models, but the pricier iPhone 8 Plus is still selling better than expected. Remember a couple of years ago when half of Wall Street was crying that Apple would be doomed unless it started selling much cheaper iPhone? Good call.
