Apple began taking preorders for the iPhone Xr on Friday at 3 a.m. ET. Between then and noon ET, we measured online lead times for delivery 9 times. The following are our takeaways:
- We were surprised to see that lead times remained entirely unchanged except for several SKUs on T-Mobile.
- By comparison, in September, the iPhone Xs and Xs Max had lead times as long as 3-4 weeks, and last year’s (Oct 2017) iPhone X had lead times of 5-6 weeks. As of noon ET, you can still order a Xr and have it delivered on October 26.
- Drawing insights from lead times is not a science, given we don’t know how many phones Apple is able to produce. That said, over the years (dating back to the iPod), longer lead times have historically been an indicator of healthy demand and shorter lead times softer demand.
- Despite this negative initial data point, we remain optimistic that the Xr will be the top-selling iPhone over the next 12 months, given it represents the greatest value. We continue to expect the Xr to account for 38% of new units in FY19.
Focus Shifts to Next Week
Our next data point related to Xr demand will come on Friday, October 26th when we count and survey launch lines. If lines are shorter than what we observed for the Xs and Xs Max launches in September, we will reevaluate our mix assumptions. Either way, this doesn’t change our belief that iPhone unit growth in FY19 will be 3% y/y, slightly ahead of the Street’s 1%. Separately, we continue to believe there is ASP upside and are modeling for $791 vs. the Street at $770.
Disclaimer: We actively write about the themes in which we invest or may invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we may write about companies that are in our portfolio. As managers of the portfolio, we may earn carried interest, management fees or other compensation from such portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making any investment decisions and provided solely for informational purposes. We hold no obligation to update any of our projections and the content on this site should not be relied upon. We express no warranties about any estimates or opinions we make.