20 July 2019
When Apple releases its latest quarterly results on Nov. 1, investors are likely to focus on its sales growth following the launch of several new products. Photo: AFP
When Apple releases its latest quarterly results on Nov. 1, investors are likely to focus on its sales growth following the launch of several new products. Photo: AFP

Will iPhone XR help Apple boost sales growth?

Apple will announce its latest quarterly results on Nov. 1. Investors are likely to focus their attention on the year-on-year sales growth for the three months to September as several new products, including the flagship iPhone XS series and Apple Watch series 4, were launched in September. They would like to know if the technology firm is able to sustain its strong momentum in selling iPhone as a luxury product in its annual upgrade.

Prior to the release of the latest earnings figures, Apple will be busy launching new products for the peak shopping season. The iPhone XR will hit the stores on Friday, and the latest iPad, Macbook and other new offerings will be launched in an event in New York next Tuesday.

Market observers said the latest iPhone launch was not as hot as in previous years. While many Apple fans feel they have little incentive to upgrade as their existing handsets are still working well, things may change with the introduction of the iPhone XR, a more affordable model with specifications that are similar to those of the flagship iPhone XS.

Apple has started to accept orders for iPhone XR last Friday and the phone will be on store shelves from tomorrow. Responses to the new model vary according to market. In Hong Kong, consumers can still pre-order iPhone XR for delivery as early as this Friday.

In Taiwan and several other markets, iPhone XR has generated much better response than the iPhone XS series. Customers, however, need to wait around one to two weeks for delivery.

In mainland China, buyers will just have to wait three to five days. There is also a keen interest in Japan, although consumers will have to wait one to two weeks for some models such as yellow, blue, coral and red.

Surprisingly, in the UK market, all the models and colors of iPhone XR will need a waiting time of one to two weeks for shipment.

All this suggests that iPhone XR is likely to do better than the iPhone XS series. Apple believes that affordability (iPhone XR starts from US$749) will lure old iPhone users into upgrading to the latest model.

According to mobile analytics service provider Flurry, iPhone 7 is the most popular Apple smartphone with 15.40 percent market share, followed by iPhone 7 Plus and iPhone 6s (12.73 percent and 12.40 percent respectively). On the other hand, iPhone XR has the potential to corner more than 40 percent of existing iPhone users.

Market research also showed that the iPhone XS series generated much better results than the iPhone 8 series last year. In the United States, the launches of iPhone XS and XS Max were almost 50 percent more successful than the introduction of iPhone 8 and 8 Plus, according to new data from Flurry. In addition, the new models are generating 7 percent more revenue than the iPhone 8, 8 Plus, and iPhone X combined.

We all know that iPhone is the key product of the whole Apple Group. It could be an uphill battle for the company to achieve growth this year, although iPhone XR will play a key role to sustain the company’s momentum.

Analyst Kuo Ming-chi said in a research note early this week that iPhone XR shipment is “more stable” because it will drive more customers to upgrade than the iPhone 8 series over time, even though pre-order demand has been lower than that for iPhone XS models.

Kuo raised his shipment forecast for iPhone XR to 36 million to 38 million units in the fourth quarter of 2018, up 10 percent from his original estimate of 33 million to 35 million units.

Apple CEO Tim Cook will give investors a report on the sales performance of the new iPhone series next Thursday. Stay tuned.

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EJ Insight writer

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