Apple’s new $1,000 iPhone met Wall Street’s high Xpectations, but with one big caveat: It’s not available soon enough.
On Tuesday, Apple unveiled new smartwatches, an Apple TV and the iPhone 8 and 8 Plus at a press event. But the showstopper was a premium device called iPhone X, with a starting price of $999.
While the 8 and 8 Plus resemble existing iPhone models, with a few new features thrown in, the X is a more radical overhaul. It has an all-glass design, an edge-to-edge display, and the option to unlock with facial recognition.
Apple is touting the iPhone X as nothing short of “the future.” The stakes could not be higher for Apple to make sure X lives up to the hype.
Apple hasn’t refreshed the look and feel of its iPhone line since 2014, cutting into demand for what has long been its main moneymaker. Apple’s annual sales declined in 2016 for the first time since 2001. Sales fell again in the beginning of this year following the rumors about the big tenth anniversary iPhone launch.
After Apple’s press event, a number of Apple analysts said they believe X may mark the sweet spot.
“In our view, Apple took the iPhone franchise to a whole new level with the iPhone X, pushing the company deep into the ultra-luxury smartphone market,” Brian White, an analyst Drexel Hamilton, wrote in an investor note Wednesday.
Gene Munster, a top analyst now with Loup Ventures, said the new technologies included with the iPhone X “solidify the platform on which Apple will retain and grow its user base for the next decade.”
The iPhone X has a new camera system that enables the facial recognition option and can be used to power animated emojis with your facial expressions. The phone also replaces the home button with new swipe gestures. And like the 8 and 8 Plus, the X will have wireless charging.
Industry watchers are unfazed by the four-figure price tag. The assumption, according to William Blair analyst Anil Doradla, is consumers are more willing to “pay up” for a premium iPhone now because of their “increasing dependence on smartphones and the role they play” in our daily lives.
Instead, the chief concern about the iPhone X is the timing.
Apple said the iPhone X won’t start shipping to customers until November 3, more than a month later than the other new iPhone models and later than Wall Street had expected.
Amit Daryanani, an analyst with RBC Capital Markets, says the delay “could partially shift” some of the expected surge in iPhone sales into early next year.
Instinet analyst Jeffrey Kvaal echoed the concern in a note, but said the delay “may not matter” for Apple’s iPhone sales when viewed over the course of the 2018 fiscal year given anticipated strong demand.
A more fundamental concern may simply be whether Apple can churn out enough of the high-end devices to meet that demand.
“Supply of iPhone X will be the single-biggest challenge for the next few quarters,” Ben Schachter, an analyst with Macquarie, wrote in another note.
