Apple iPhone 8 Has an ‘S’ Sales Problem

October 23, 2017, 2:29 PM UTC

Apple’s iPhone 8 and iPhone 8 Plus aren’t selling like next-generation handsets, a new study suggests.

The iPhone 8 and iPhone 8 Plus accounted for a collective 16% of total U.S. iPhone sales during the third quarter, researcher Consumer Intelligence Research Partners (CIRP) said on Monday. While the devices were able to achieve that in just a couple of weeks on store shelves, their share of sales is far behind the iPhone 7 and iPhone 7 Plus, which accounted for 43% of sales when they went on sale in September 2017.

“Two years ago, the iPhone 6S and 6S Plus represented 24% of sales. And, three years ago, the iPhone 6 and 6 Plus were 46% of sales in their launch quarter,” CIRP partner and co-founder Josh Lowitz said in a statement. “So, in terms of consumer demand and reception, the 8 and 8 Plus have a share of total sales that makes them look much more like an ‘S’ model, while the 7 and 7 Plus was closer to the very well-received 6 and 6 Plus.”

Historically, Apple (AAPL) has released big iPhone updates every other year that come with new numbers (iPhone 4, iPhone 5, iPhone 6, and so on). In the interim years, Apple uses the “S” branding to signify a minor upgrade. Those devices, called the iPhone 4S, iPhone 5S, and iPhone 6S, typically don’t initially sell as well as the big updates.

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However, the iPhone 8 is a bit of a different story.

Although Apple has called the handsets the iPhone 8 and iPhone 8 Plus rather than the iPhone 7s and iPhone 7s Plus, they’re only minor upgrades over last year’s models. The major upgrade this year came in the form of the iPhone X, which is slated to hit store shelves next month. It comes with a major redesign, featuring a screen that nearly entirely covers its face. It’s also the first iPhone to come with Apple’s Face ID facial-scanning technology.

So, while the iPhone 8 is technically not an “S” handset, in customer minds, it might feel like one. And that’s perhaps why its early sales are more inline with those interim updates rather than the major upgrades.

“It seems when Apple announced the the forthcoming iPhone X, it changed the market dynamic, and probably depressed demand for the iPhone 8 and 8 Plus,“ CIRP partner and co-founder Mike Levin said in a statement.

CIRP’s study, which includes data from 500 U.S.-based Apple customers in the third quarter, is the latest in a string of reports that suggest iPhone 8 sales have been disappointing. One report last week said that even Apple’s iPhone 7 is outselling its iPhone 8. However, most of those reports agree that when the iPhone X launches next month, demand will be high. Exactly what that means for the iPhone 8 is still unknown.

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