The only thing the tech press loves more than good Apple news and device rumors is bad Apple news. I guess this just is the tech equivalent of “if it bleeds, it leads.” And when it comes to bad news about Apple sales, it is usually an analyst of one sort or another that is lighting the match that starts the fire.
In a recent case, CNBC obtained a research note from Neil Campling of Mirabaud Securities claiming that “the iPhone X is dead.” I really thought we finished these misguided stories off back in January, but here we are again. We’ve had many sources talking about the fact that there will be three new iPhones this year. It is no secret that one of them should be an upgraded version of the current 5.8″ iPhone X design. If the iPhone X were “dead,” this would not be the case.
I do understand what Mr Campling is getting at. He is saying that the existing iPhone X won’t continue to be produced or sold next year. While it is a little unusual for Apple to take this approach, it isn’t without precedent. When Apple released the iPhone 5S, they did not continue to produce the iPhone 5 alongside it. That design was expensive to make during the first two years, so Apple replaced it with the iPhone 5C, a phone with the same internals but a different body that was easier and less expensive to build.
I think it is very clear that the iPhone X is more expensive than average to make. We also have multiple indications that Apple will be releasing a slightly larger iPhone with Face ID and the same basic design, but with an LCD screen in place of the X’s OLED to cut costs. It sounds like Apple may be taking a page right out of 2013 here. While this potential new phone doesn’t sound like nearly as radical a departure from its predecessor in terms of construction that the 5C was, it still shows the same basic idea. Apple is taking a phone it can’t sell as cheaply as it would probably like and replacing it with a modified design that it can.
Not all analysts share Mr Campling’s opinion of the iPhone X as an abject failure, either. An article on Tom’s Guide called Apple’s Killing Off the iPhone X? Uh, Not So Fast has a quote from Global Data research director for consumer devices Ari Greengart saying:
“It’s extraordinarily unlikely that after the iPhone X sold so well — which we see in Apple’s results in the first quarter — that even if it tanked, it’s unlikely that Apple could change course and decide to kill it…Frankly, the whole thing sounds ridiculous…”
That sounds pretty reasonable to me. Sean Chandler, writing at Seeking Alpha, had similar remarks in his recent explanation of why he is buying more Apple stock while it is temporarily down. He is clear in his assertion that Apple lost $60 billion in market value in just two days because of the market behaving irrationally in the face of a few negative reports.
No matter what the sales of the iPhone X look like, it isn’t dead. It certainly won’t be killed off early in the 2018 production cycle. Anyone who say that really is being ridiculous and grasping at straws to try and prove it. And even though it likely won’t continue to be produced in the next cycle, we have a good idea that of the very valid reason why, and how that reason dovetails with a similar instance with a new iPhone design a few years ago.
My non-expert, not pretending to be an analyst advice to you- wait for some actual numbers from Apple, and make up your own mind about Apple stock and the company’s future. Whatever happened with iPhone sales last quarter will be no more than a bump in the road that everyone will move on from quickly. The iPhone X design will be staying with us in a new and expanded lineup later this year. No matter what the three expected phones are called, their very existence proves that the iPhone X isn’t dead at all.