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iPhone Launch Takeaway: Xs Max Demand Exceeds Historical Plus Demand
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By Gene Munster and Will Thompson of Loup Ventures
We surveyed 50 customers outside of 5 U.S. Apple stores [Saturday] morning. Notably, there were 406 people in line at New York’s 5th Avenue store, compared to 821 for the iPhone X and 293 for the iPhone 8.
Lines for iPhone Xs and Xs Max Were Short, As Expected
This year’s iPhone Xs/Xs Max launch line at Apple’s flagship 5th Avenue store in New York was 406 people vs last year’s two separate launches which saw 821 for the iPhone X and 293 for the iPhone 8. Overall, this line count is in line with our expectations for two reasons:
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Today’s Observations Increase Our Confidence in Higher ASPs
Customers are more interested in the Xs Max this year than they have been interested in Plus-sized phones in the past. Our confidence in our overall iPhone ASP of $791 for FY19 increased today, given 70% of customers we surveyed were buying the Xs Max. We were expecting 55%, which is consistent with a 54% average uptake of the Plus models from iPhone 6, 6s, 7, and 8. This $791 ASP estimate compares to Street consensus of $765, which is up from $757 before the Sept. 12 iPhone announcement event.
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We’re Slightly More Optimistic Than the Street for FY19 Unit Growth
These shorter lines don’t change our expectation that iPhone unit growth for this next cycle will be 3% versus the Street at 0%. Our optimism is based on our belief that increases in display sizes pull in upgrades from out years. This would be positive for FY19 unit growth and potentially negative for FY20 growth. That said, what’s most important is that the iPhone is moving toward longer-term stability and should normalize to a range of 0-5% growth.
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