Analyst: First-day iPhone preorders in China weaker than last year

Rosenblatt’s Jun Yhang suspects customers are waiting for the cheaper iPhone Xr.

From a note to clients that landed on my desktop Friday morning:

We performed channel checks in relation to initial online and offline preorder data for the new iPhones that were announced on September 12. Compared to the last few years, our research tells us that first day preorders in China for the iPhone XS and iPh- one XS Max is weaker than previous iPhone launches.

  • China Mobile’s online portal, which had about 20,000 preorders on the first day. We also expect there to be an additional 50,000-60,000 preorders through China Mobile’s offline channels. This is weaker than other iPhone models, such as the iPhone 6, iPhone 8, and iPhone X.
  • JD.Com’s data, which suggests preorders for the iPhone XS and iPhone XS Max was ~2200 and ~8300 units, respectively, in the first hour of preregistration, even with the company selling the dual SIM iPhone XS and iPhone XS Max. This data also shows preregistration in the first hour was weaker compared to the iPh- one X released last October.

We believe the weakness in preorders for the new iPhone models is attributable to:

  1. The dual SIM iPhone XS and iPhone XS Max selling through the open market, in- stead of through operator channels.
  2. Consumers waiting for the release of the iPhone XR.
  3. Smartphone subsidies from Chinese operators largely declining year-over-year, making for less interest from consumers to buy from operator retail channels.

We will continue to track China Mobile, JD.Com, and other online channels over the next few weeks in order to get the full picture. We do believe that the big difference in price, compared to older iPhone models (iPhone 6, 7, and 8), is having a significant impact on sales, so it may be difficult to compare to later iPhone models.

Maintains Buy rating and $200 price target.

My take: Zhang did a similar count last year and correctly predicted that the iPhone X would outsell the 8 and 8 Plus.

7 Comments

  1. Gregg Thurman said:

    The goal is revenue and net income. Considering the huge increase in iPhone XS/Max ASP this year vs last year I’m not concerned about lower preorder counts, especially when the iPhone model everybody expects to be the big seller not shipping until late October.

    0
    September 14, 2018
  2. Ken Cheng said:

    Then again, the gold colored iPhone and Watch are far more appealing to the Chinese consumer than previous iterations of gold.

    Personally, I had to think about whether or not pre-sales began last night or tonight. Eventually, I went to the Apple Store to check what it said, and the Store was down, meaning that Pre-sales were that night. The gap between Event and pre-sales seemed short. Maybe, it’s just me or I was busy, but I usually like to mull over the decision for about a week.

    In the end, I ordered online from the Verizon app, since they seemed to open a couple minutes before 3:00am, and were offering $50 off a Watch and iPhone purchase.

    0
    September 14, 2018
  3. Gianfranco Pedron said:

    Gimme a break, Jun Yhang!

    It’s way to early in the game to have anything worthwhile to say. … but don’t let that stop you.

    “Wise men speak because they have something to say; fools because they have to say something.”
    ― Plato

    1
    September 14, 2018

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