Apple Shipped an Estimated 29 Million iPhone X Devices in Q4 2017

Apple shipped 29 million iPhone X devices in the fourth quarter of 2017, according to new research data shared today by Canalys. At 29 million devices shipped, the iPhone X was the “world’s best-shipping smartphone model over the holidays.”

iPhone X shipments were not, however, the fastest ever for an iPhone due to Apple’s decision to offer the device alongside the iPhone 8 and the iPhone 8 Plus, and shipments were below industry expectations.


Canalys says that adoption was largely driven by upgrade demand in operator-centric markets like the United States where the installed base is high and customers can finance $999 cost of the device over many months. Apple was able to hit the 29 million number after a significant increase in production throughout November and December, with the company shipping out iPhone X orders earlier than expected and hitting supply/demand balance towards the end of the month.

“The iPhone X performance is impressive for a device priced at US$999, but it is slightly below industry expectations,” said Ben Stanton, Analyst at Canalys. “Apple struggled with supply issues in early November, but achieved a massive uplift in production in late November and throughout December. This helped it meet and even exceed demand in some markets by the end of the quarter. One major benefit to Apple is that customers are increasingly realizing the residual value of their old smartphones, opting for trade-in programs to offset the high price of the iPhone X. But that big price tag, and Apple’s split launch strategy, still had an impact, and shipments were not the fastest ever for an iPhone.”

Of the 29 million iPhone X devices that were shipped in the fourth quarter of 2017, Canalys says seven million of those were shipped to China, a country where Apple has been aiming to increase growth.

Canalys says that along with the iPhone X, iPhone SE, iPhone 6s, iPhone 7, and iPhone 8 models also continued to “ship well” in Q4 2017, with the older smartphones remaining popular due to their lower price tag.

“Apple is looking at its best performance to date, all thanks to the massive changes it made to its portfolio in Q3,” said Canalys Analyst TuanAnh Nguyen. “This strategy has hedged Apple’s risk as it upgrades the iPhone, in both design and user experience. While new technologies, such as Face ID and bezel-less displays, help to justify the US$999 price tag and maintain competitiveness with Samsung, Huawei and Google, having a larger portfolio allows Apple to meet its overall shipment targets, and protect its market leadership in the premium segment.”

Canalys’ data is in line with other estimates that have suggested the iPhone X sold well — though not as well as hoped — during its first few months of availability. Consumer Intelligence Research Partners recently said that 20 percent of all iPhones sold in Q4 2017 were iPhone X devices, while 24 percent were iPhone 8 devices and 17 percent were iPhone 8 Plus devices.

Kantar Worldpanel said that the iPhone X saw “stellar” performance in several countries during its first month of availability, though it was outsold by the iPhone 8 and the iPhone 8 Plus. Combined, Apple’s three new iPhones captured the top spots for best-selling smartphone models during the month.

Though Apple does not breakout iPhone sales on a model-by-model basis, we’ll get a better idea of just how well the iPhone X sold when Apple announces its Q1 2018 earnings on Thursday, February 1.

Apple’s guidance for the first fiscal quarter (fourth calendar quarter) of 2018 includes expected revenue of $84 to $87 billion and gross margin between 38 and 38.5 percent. It will be a record setting quarter even at the low end of the guidance range, as Apple reached just $78.4 billion in revenue in Q1 2017.

Related Roundup: iPhone X
Tag: Canalys
Buyer’s Guide: iPhone X (Buy Now)

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Canalys: Apple’s iPhone X shipped 29 million in Q4, ‘slightly below industry expectations’


As the debate over sales of Apple’s iPhone X continues to brew, a research firm released data today that’s sure to provoke another round of thumbsucking.

According to Canalys, Apple shipped 29 million iPhone Xs in Q4 2017 (a quarter that Apple would refer to as Q1 2018), a figure that made it the “world’s best-shipping smartphone model over the holiday season.” Given a price tag that starts at $ 999, and given that it was only available in limited supplies for just over half the quarter, that would seem like a huge success.

But…

“The iPhone X performance is impressive for a device priced at US$ 999, but it is slightly below industry expectations,” said Ben Stanton, Analyst at Canalys, in a statement. “Apple struggled with supply issues in early November, but achieved a massive uplift in production in late November and throughout December. This helped it meet and even exceed demand in some markets by the end of the quarter. One major benefit to Apple is that customers are increasingly realizing the residual value of their old smartphones, opting for trade-in programs to offset the high price of the iPhone X. But that big price tag, and Apple’s split launch strategy, still had an impact, and shipments were not the fastest ever for an iPhone.”

That analysis comes on the heals of recent analysts reports that the iPhone X was losing momentum, and even some talk that Apple might discontinue it given softening sales and lack of interest in China. Canalys claimed that Apple shipped 7 million units in China during the quarter.

To degree that this may be bad news, there are plenty of silver linings, according Canalys. After working through supply issues, Canalys indicates that the iPhone X was eventually overperforming. So recent talk that Apple’s expectations for the current quarter might be soft, which has led some analysts to downgrade the stock, could be premature.

Second, Canalys said overall iPhone sales got a boost from Apple’s decision to continue selling a wider portfolio of phones than usual. The new iPhone 8s, plus the older versions, are attracting a lot of interest from buyers.

“Apple is looking at its best performance to date, all thanks to the massive changes it made to its portfolio in Q3,” said Canalys Analyst TuanAnh Nguyen. “This strategy has hedged Apple’s risk as it upgrades the iPhone, in both design and user experience. While new technologies, such as Face ID and bezel-less displays, help to justify the US$ 999 price tag and maintain competitiveness with Samsung, Huawei and Google, having a larger portfolio allows Apple to meet its overall shipment targets, and protect its market leadership in the premium segment.”

Apple is scheduled to report earnings for the three months ending December 31 on February 1.

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Netflix added another 8.3 million subscribers in a ‘beautiful’ Q4

Wall Street likes it, too.

A quick look at Netflix’s Q4 results: It added 8.33 million streaming subscribers around the world. The company had told Wall Street that it would add 6.3 million. “Beautiful,” per the company’s investor letter.

Netflix had told Wall Street it would add 1.25 million subscribers in the U.S. and another 5.05 million internationally. Instead, it added 1.98 million in the U.S. and another 6.36 million outside the U.S.

(Correction: An earlier version of this story incorrectly reported Netflix’s Q4 numbers, which exceeded the company’s previous forecast by two million subscribers.)

Netflix told investors that it would add 1.45 million domestic subs in Q1 and another 4.9 million outside the U.S.; Wall Street had expected 1.265 million and 3.73 million, respectively.

Netflix CEO Reed Hastings uses the rest of his letter to hit on themes he has come back to for many years: The company is growing, competition is growing, and Netflix’s spending on original content is growing.

The company still plans on spending up to $ 8 billion on content this year, up from roughly $ 6 billion in 2017. And it will boost its marketing budget for those shows from $ 1.3 billion to $ 2 billion, “because our testing results indicate this is wise,” Hastings writes. “We want great content, and we want the budget to make the hits we have really big, to drive our membership growth.” [An earlier version of this story incorrectly reported that Netflix was spending $ 8 billion on its original content. The $ 8 billion sum is for all of its programming.]

Also increasing: The company’s cash burn, which hit $ 2 billion last year. Eventually, Hastings says, the company’s margins will increase while its content spend starts to slow, and the company will turn free cash flow positive.

But this year the company expects its burn to increase to between $ 3 billion and $ 4 billion, which means it will have to borrow more money at expensive rates. No problem, Hastings writes: “High yield has rarely seen an equity cushion so thick.”


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