But Apple will still turn a hefty profit.
Apple’s iPhone 8 pre-orders are a little slower than previous models, and the handset might have an unlikely foe to thank for it.
In a note to investors this week, KGI Securities analyst Ming-Chi Kuo said that iPhone 8 and iPhone 8 Plus pre-orders are sluggish because of strong demand for Apple’s upcoming iPhone X. In the note, which was earlier reported on by Apple-tracking site 9to5Mac, Kuo said pre-order shipment dates after initial orders are placed usually stands around three to six weeks. Depending on the model they want, if consumers order an iPhone 8 or iPhone 8 Plus today, they might be able to get it on Friday’s launch day or need only to wait a week for the handset to arrive.
Apple AAPL has been offering pre-orders on new iPhones for years. And in most cases, the handsets it starts selling in September see their initial supply run out soon after the company turns on pre-order sales. By mid-morning of pre-order day, it’s not uncommon for new purchasers to have to wait weeks, if not a couple of months, for their smartphones to arrive.
But the iPhone 8 and iPhone 8 Plus were different. The smartphones were announced alongside the iPhone X, a major upgrade, featuring a big screen that nearly entirely covers the face and a revamped design featuring glass and stainless steel. Apple has called the iPhone X the “future” of smartphone technology, which might have made some would-be iPhone 8 customers feel like they were buying outdated hardware.
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For its part, Apple AAPL tried to allay some of those fears by bringing a similar glass finish to the iPhone 8 line. Apple’s handsets are also running the same A11 Bionic chip that users would find in the iPhone X, and all three of the company’s new smartphones support wireless charging.
Still, iPhone 8 and iPhone 8 Plus models are readily available, marking a stark departure from Apple’s recent iPhone pre-orders.
According to Kuo, it appears a large number of Apple customers are simply waiting for Apple to offer pre-orders on the iPhone X starting on October 27. And although the iPhone X comes with a hefty $999 price tag to start, at least the early adopters don’t seem concerned.
While Apple hasn’t commented on pre-orders, it’s unlikely the company would bemoan customers waiting to buy the iPhone X.
On Monday, researcher Susquehanna International Group estimated that Apple pays $581 for the components inside its iPhone X, giving the company a profit margin of $418 per unit before it factors in assembly cost. Last year’s iPhone 7, which cost $649, cost Apple $401 for its components. That translated at the time to a $401 profit. Apple, in other words, should make a surprisingly high margin on the sale of each iPhone X.