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Analysts applaud Apple iPhone X strategy

13 SEP 2017

Apple’s simultaneous announcement of the $999 iPhone X with the iPhone 8 and 8 Plus allows the company to drip-feed new technology into the range without alienating its core customer base, industry analysts said.

The launch of Apple’s new premium device in San Francisco came alongside several other devices. Availability of the iPhone X though, is expected to be limited due to potential issues mass producing the new OLED screen.

Apple’s premium device is also not available until November, compared to a mid-September launch date for the more familiar looking iPhone 8 and 8 Plus.

Supply constraints
“The major problem Apple has is to innovate at scale,” Canalys senior analyst Tim Coulling told Mobile World Live (MWL), adding: “By changing screen to OLED technology you are looking at screens that are supply constrained.”

However, he added announcing both devices at the same time “made sense” as it would address criticism over a lack of innovation while at the same time offering something more standard to its core customer base.

“A new device needs to appeal to people within the ecosystem. It also needs to cater for people who said it isn’t innovative – even though we’ve seen most of the headline-grabbing technology [in the iPhone X] before,” Coulling said.

The price differential, he believes, will also limit demand for the iPhone X and counter any production issues.

CCS Insight chief of research, Ben Wood, expects Apple to eventually rollout the new technology in the iPhone X to all future models but: “A staggered introduction of OLED technology and the new design enables Apple to steadily ramp up its scale and supply chain.”

Standard design
Analyst reaction to the launches was widely positive with experts acknowledging the need for differentiation while also keeping sales ticking with a more familiar model.

“Apple is hoping the later availability date for iPhone X will not affect iPhone 8 sales this quarter,” Ian Fogg, senior director at IHS Insight, said, adding: “Apple’s lower iPhone 8 pricing should limit the impact, but it remains a risk.”

“While Apple risks losing iPhone 8 sales in advance of iPhone X availability, it is the right decision to announce iPhone X now. Keeping it quiet until a second product launch this autumn would simply alienate iPhone 8 purchasers and damage Apple’s business in the long run.”

Ovum senior analyst Daniel Gleeson told MWL the prospect of the iPhone X launch and its advanced features may hamper Apple’s sales of the iPhone 8 and, in turn, its earnings in the near term, though the company could make up this ground with a bumper holiday sales period as iPhone X sales make an impression.

“The much higher price and the allegedly limited supply will leave many potential iPhone X customers feeling aggrieved. It will also serve to highlight the fact that many of the iPhone X’s key features such as the edge to edge display, super high pixel density, dual OIS camera lenses, are on competitors’ products, but not the iPhone 8.”

iPhone X
Apple’s iPhone X left few surprises as most of the new features had been the subject of “leaks” and speculation from media and blogs around the world.

The company’s new flagship – billed as the tenth anniversary edition – uses OLED screen technology for the first time, expands the screen to cover a larger proportion of the device and removes the home button. It also features wireless charging, a feature long seen on rival devices, and incorporates facial recognition technology to unlock the handset.

Other improvements include advanced camera functions and enhancements to the processor and graphics chips within the device.

Further launches
The iPhone 8 and 8 Plus are available at a lower price-point and are viewed by analysts as the natural successor to its current devices. They include wireless charging and improved cameras, but retain the home button and use the standard iPhone display.

Apple also unveiled the latest iteration of its Watch – the Watch 3 – marketed as featuring an enhanced processor and cellular connectivity for the first time.

For full coverage of the Apple launch event, click here.

Author

Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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