Survey suggests better than expected demand for iPhone X and iPhone 8, but lines will be shorter tomorrow.  This week we surveyed 388 consumers in the U.S. across all demographics and found that of those planning to buy an iPhone in the next year, 25% plan on purchasing an iPhone X and 39% and iPhone 8 and 8 Plus. We are modeling for iPhone X to be 20% of units over the next year, and iPhone 8 and 8 Plus to be 25% of units over the next year. Said another way, the survey suggested 64% of iPhones in the next year will be either the iPhone X, iPhone 8, or 8 Plus, compared to our current model of 45%. While we are encouraged by this survey, we are keeping our iPhone mix estimates unchanged to err on the side of conservatism.

Expect shorter lines this year. We will be making our annual pilgrimage to a handful of Apple retail stores to count lines and more importantly, survey people regarding their intended purchases. The lines have been declining over the past two years. For example, the line at the 5th Avenue New York store declined from 1,880 people in 2014, to 650 in 2015, and 400 last year. Given the most current version of the iPhone is split between the iPhone X and iPhone 8, and more people are purchasing their phones online or through the iPhone upgrade program, our best guess is that lines will be less than half as long as we observed in 2016. In addition, the 5th Avenue New York store is undergoing major renovations, and has been moved to an adjacent building which will likely impact the 5th Avenue line count. These shorter lines don’t change our expectation that iPhone unit growth for this next cycle will be 9% versus 3% for FY17.

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