Counterpoint Research: iPhone XR was Apple’s bestseller amid falling sales

From Overall iPhone Sales Down 20% YoY In November; iPhone XR Became the Best-Selling Model:

  • Sale of new iPhones (XR/XS/XS MAX) launched in November were down over 20% YoY compared to last year’s launches (8/8 Plus/X).
  • The iPhone XR series outsold XS and XS Max series, iPhone XR 64 GB became the best-selling iPhone during the month.
  • iPhone XR sales, when compared to iPhone 8, were down 5%, both being the cheapest new iPhone available during the month of their respective launches.
  • Similarly, iPhone XS, when compared to iPhone 8 Plus, was up 3% YoY. iPhone XS Max, when compared to iPhone X during the same month last year, shows a 46% decline in sales. However, cumulative sales of iPhone XS Max were 50% higher till November than that of iPhone X last year due to the early availability of the higher priced models this year.
  • We estimate iPhone XR to further eat into the share of higher-priced iPhone XS and XS Max during December 2018.
  • Sales in China during November were steady due to the popular 11.11 (Single’s Day) sales. Even then, sales of iPhone XR remained lower than expected due to a lack of innovative features and just one camera. And while it’s the cheapest new iPhone, it still is expensive compared to local competitor products.
  • China iPhone sales in December will be down partly due to the ongoing trade war between US-China and Chinese companies encouraging employees to buy smartphones from Chinese OEMs.
  • We are also expecting an increase in sales of older iPhone models like iPhone 8 and iPhone 7 in emerging markets due to the high price of newer models.

Cue the bar chart:

counterpoint iphone xr bestseller

My take: Apple SVP Greg Joswiak leaked the iPhone XR November sales news to reporters nearly six weeks ago, but didn’t say anything about overall iPhone sales. Apple must have suspected by then that they were going to have issue new guidance. Why did they wait until the new year to tell investors?

5 Comments

  1. Robert Paul Leitao said:

    There’s finally some context for Apple’s revenue warning with other smartphone makers experiencing pressure on new unit sales. Please remember the iPhone X was released in November last year. The iPhone Xs handsets debuted in late September while the iPhoneXr debuted in October. There were new unit sales of the Xs handsets pulled into the end of the September quarter.

    New iPhone unit sales have been in decline since FY2015. In that fiscal year the Greater China region experienced explosive growth of nearly 85% and revenue from that region hasn’t returned to FY2015 levels since. Following FY2015’s nearly 28% rise in global revenue, FY2016 experienced a nearly 8% drop in revenue year-over-year.

    It’s possible Apple’s FY2019 revenue may come in below FY2018’s level. But revenue jumped last year by nearly 16%. This might be an unpleasant reality to many, but this doesn’t create a crisis.

    Apple’s near-term future involves the iPhone. Apple’s long-term future is beyond the iPhone. Keep in mind sales of pre-owned iPhones are growing at a double-digit rate and new iPhones sold today are likely to be in service for three to four years.

    To accurately gauge Apple’s success, revenue must be gauged over multi-year periods and the success of the iPhone line must be gauged with the sales of pre-owned iPhones in the mix. Average revenue per user (ARPU) which takes into account Services attachment and sales of constituent products such as AirPods and the Apple Watch will become a far more relevant metric than new iPhone unit sales in any quarter or fiscal year.

    1
    January 8, 2019
  2. Gregg Thurman said:

    OT to this thread but Samsung and LG just warned quarter end results.

    Samsung is guiding its operating profit for the quarter would be around $9.7 billion. That’s 28.7% lower than the year before — and almost 18.2% under analyst expectations.

    LG followed that announcement with a whopping 80% year-on-year drop in quarterly profits. LG’s estimate is roughly $67 million. Analysts were expecting around $344 million.

    Samsung’s shares dropped about 2% in early trading, while LG’s shares dropped about 4%.

    Apple warned a 5% decline.

    AAPL dropped almost 11%

    There is a very discernible disconnect between Company’s on WS.

    1
    January 8, 2019
    • David Drinkwater said:

      Meanwhile, today, in the wake of Samsung and LG reporting failures, AAPL rises.

      0
      January 8, 2019

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