Counterpoint: iPhone 12s ‘finally’ seeing more traction

From “A Week of iPhone 12 Sales at US Carrier Stores” posted Wednesday:

The new iPhone 12 and iPhone 12 Pro have now been selling in the US since October 23 and carriers are finally seeing more traction compared to the initial launch days. Here is the latest round-up from our research:

Demand is up: This is not a big surprise but should nonetheless be mentioned. Despite COVID-19 and still over 7.75 million people receiving unemployment benefits, stores are seeing greater interest by consumers compared to the iPhone 11 launch. There is a three-fold mix of reasons for this. 5G is becoming more of a pull for many consumers. All three carriers are now claiming nationwide 5G coverage. Carrier promos and deals are also helping since many consumers (both switchers and upgraders) are able to get a new iPhone 12 for free with select trade-ins. Lastly, the improved camera, A14 Bionic processor and increased base memory capacity, all are providing strong reasons to upgrade for many iOS users. This is true for both older generation iPhones (6,7,8 series) and newer iPhone X and 11 series owners.

Orders go online: Carriers are driving customers to their websites to purchase devices. We estimate that iPhone sales went over 70% online during this initial launch phase. AT&T stores have an automatic message telling people to go online to order a new iPhone since reps cannot take orders over the phone. Apple asked consumers to not stand in lines on the opening day of the launch. To keep consumers and Apple employees safer, the company asked consumers to order online or order online and then pick up in-store at a certain time to help stores comply with COVID-19 safety procedures.

My take: Claiming nationwide 5G coverage is not the same as delivering it.

6 Comments

  1. Bart Yee said:
    “Claiming nationwide 5G coverage is not the same as delivering it.”

    Exactly, and specifically which flavor of “5G” and how good is your local coverage is quite variable and still rolling out.. Will people be willing to subsidize (or be subsidized?) the Telecoms for a year or two waiting for 5G to get better?

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    November 4, 2020
  2. Bart Yee said:
    Another quote from Counterpoint:
    “However, with the first week of sales for the iPhone 12 behind us, we are seeing increased weakness of the iPhone SE. The iPhone SE 2020 did not get a price drop, and with the new iPhone 12 Mini coming out, some people who want a smaller iPhone are waiting to get the iPhone 12 Mini.”

    For the US and Europe, this is important. Apple will gladly have customers make the higher ASP of the mini as small iPhone of choice for those not on a strict budget. We shall see whether the mini or Pro Max pulls more interest in China and elsewhere. My bet is Pro Max on a revenue basis but a good sales mix of all iPhone 12 models surpassing iPhone 11 would make them all big hits.

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    November 4, 2020
    • Jerry Doyle said:
      @Bart Yee: Relative to whether the Pro Max pulls interest — My experience traveling in China and in the eleven countries in Southeast Asia is an experience of seeing citizens who prefer the larger screens, phablets, such as the screen the new iPhone 12 Pro Max offers. Many good citizens lack discretionary funds to purchase lap tops and tablets, so to compensate for that fact they go for the phablet type larger screen that affords the larger real estate of screen that bring utility of purpose one gets from using tablets and laptop. Workers love the phablets for use in the conduct of business. So, I suspect the iPhone 12 Pro Max will be the phone of choice.

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      November 4, 2020
    • Robert Paul Leitao said:
      Bart:

      I would expect some cannibalization of iPhone SE sales with the release of the new iPhone 12 handsets. The iPhone SE is a very attractive iPhone at a very attractive price. Historical data evidences at the release of new flagship iPhone models initial demand skews to higher-priced models. This tends to moderate a few months after initial release.

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      November 4, 2020
  3. Jerry Doyle said:
    “…. and still over 7.75 million people receiving unemployment benefits, stores are seeing greater interest by consumers compared to the iPhone 11 launch.”

    The above statement makes me roll-my-eyes. Anyone who has been on “unemployment” knows acutely that the amount of public assistance received is modest at best and used to hopefully, meet “basic” family needs; not go out and purchase a new phone costing upwards to $1,000. If this is happening, then it has to be happening by an adult child on unemployment living with his parents or grandparents.

    I suspect the folk now buying the new models are the very same folk working from anywhere or folk still employed gainfully with discretionary income to upgrade. If one is receiving Unemployment, then one likely is going to extend farther use from old equipment. I see this fact around me all the time. So, what does this fact mean? It means that once unemployed folk with old phones go back to work drawing a full salary then they most likely will upgrade meaning continued iPhone sales going forward.

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    November 4, 2020
  4. Jerry Doyle said:
    “…. My take: Claiming nationwide 5G coverage is not the same as delivering it.”

    PED’s take is “spot-on.” 5G per se is not driving sales of the new models because as we all know 5G availability isn’t in the wild and will not be in the wild for years to come. When I hear the carriers say that “we added this city and that city to 5G,” then I say yes, which blocks within that megapolis did you add; certainly not the entire city.

    One carrier recently mentioned they added Dallas. Where in Dallas? It can take one hour to drive from Mesquite over to Grand Prairie or from Addison to Duncanville and in that drive I never find 5G speeds. So, what the carrier did was to add 5G to some blocks somewhere in the city within that 30 mile square area and they now are touting that Dallas has 5G coverage.

    In summary, 5G isn’t driving sales of the new models. If it is, then there are going to be a large group of disenchanted users who are wondering, “…where’s my 5G speed?” No, folk are buying these new models for other attractive inherent values they see in the phones.

    3
    November 4, 2020

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