BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

First Month Of iPhone 8 Demand Shows It Is Actually Doing Well

Following
This article is more than 6 years old.

With all due respect to Forbes contributor Ewan Spence, whose analysis I usually agree with, I differ in what the Localytics data shows regarding iPhone 8 demand. Localytics examined over 70 million iOS devices to determine what percentage of iPhone 8’s are in use and compared this to previous iPhones a month after they were launched. (Note that I own Apple shares and have sold Call options).

It is accurate that the 8’s usage trails the previous three new iPhone launches (and probably pretty much all of them). However, what needs to be taken into account is that these are percentages and not the number of devices in use. To determine how many iPhones were sold one needs to make an assumption on how many iPhones were being used and applying the percentages to them. When that is done I believe the 8 is doing well especially since the X is just a week away from consumers being able to order it and first shipments are only two weeks away.

First month of iPhone 8 usage

Localytics

Localytics data for the previous three iPhone launches one month after availability is:

  • iPhone 6 (5.8%) & 6 Plus (1.2%) had a combined total of 7.0%
  • iPhone 6s (3.4%) & 6s Plus (0.9%) had a combined total of 4.3%
  • iPhone 7 (3.6%) & 7 Plus (1.5%) had a combined total of 5.1%

For the iPhone 8 it is:

  • iPhone 8 had 1.0% usage during the first weekend
  • iPhone 8 Plus had 1.4%
  • Total iPhone 8 usage was 2.4%

One interesting point is that the 8 Plus at 1.4% is almost equal to the 7 Plus’ 1.5% and is actually ahead of the 6 (1.2%) and 6 Plus (0.9%).

The iPhone install base is critical to determining how the iPhone 8 is doing

I have models from two sell-side analysts (Steve Milunovich at UBS and Toni Sacconaghi at Bernstein) who have estimated how many iPhones are in use. Below are their estimates for the iPhone’s install base when various launches occurred and I’ve added what percentage these are to the iPhone’s cumulative sales at the corresponding points in time.

  • When the iPhone 6 was launched it was 73% of the install base or 429 million in use
  • For the iPhone 6s it was 69% or 571 million
  • For the iPhone 7 it was 66% or 686 million
  • Going into the iPhone 8 it was 63% or 787 million

So when you apply the first month usage percentages to the install base the number of iPhones that were sold are:

  • 30.0 million for the iPhone 6 & 6 Plus
  • 24.5 million for the iPhone 6s & 6s Plus
  • 35.0 million for the iPhone 7 & 7 Plus
  • 18.9 million for the iPhone 8 & 8 Plus

Keep in mind that the iPhone 6 numbers would have been higher but there was huge demand that Apple’s manufacturing partners could not fulfill.

Another statistic to consider is what was the “growth ratio” of various iPhone launches. Localytics provided first weekend percentages so when the first month is compared the growth was:

  • iPhone 6 grew from 2.3% in use to 7.0% usage or a growth ratio of 3.0x
  • iPhone 6s grew from 1.3% to 4.3% usage or a ratio of 3.3x
  • iPhone 7 grew from 1.2% to 5.1% usage or a ratio of 4.3x
  • iPhone 8 grew from 0.7% to 2.4% usage or a ratio of 3.4x

So it appears that the iPhone 8’s demand has actually been fairly consistent for the first month and pretty much in-line with previous iPhone launches. And this is in the face of the iPhone X’s upcoming launch. When you add this to the iPhone 8 still having lead-times and Bernstein’s analysis of iPhone demand in my book it looks like the iPhone 8 is actually doing well.