Wait Time for iPhone X Got Longer -- WSJ

By Tripp Mickle Features Dow Jones Newswires

After online preorders opened, shipping estimates quickly rose to five-to-six weeks

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This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 28, 2017).

Apple Inc. opened advanced sales for the iPhone X and early orders pushed estimated shipment dates into December, at least twice the waits for new models a year ago and an early indication that demand is outpacing supply for a product Apple has had difficulties manufacturing.

After online preorders began in 50-plus countries at 3 a.m. ET on Friday, delivery estimates in the U.S., China, and Japan quickly rose to five-to-six weeks. The iPhone X officially goes on sale on Nov. 3, when some phones will be available in retail stores.

Brian White, an analyst with Drexel Hamilton, said the shipment delays show the iPhone X is "not a dud" but added "we can't look at that and say, 'Demand's off the charts,' because we know there's very limited capacity."

The shipment projections are being scrutinized because they offer the first insight into consumer appetite for one of Apple's most anticipated product launches. Investors have sent Apple shares up about 35% over the past year and pushed the company's market value above $800 billion, largely on a bet that new iPhones will deliver record sales.

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Apple's ability to deliver largely rests on the iPhone X. The iPhone 8 and 8 Plus -- which hit the market Sept. 22 and feature the same basic design as preceding models -- posted the weakest sales of any of the company's new smartphones in recent years. The iPhone X offers an edge-to-edge display and facial-recognition system that led Apple to call it the smartphone of the future.

For the iPhone X to succeed, Apple must prove consumers will pay $999 or more -- the highest starting price ever for a major smartphone. The company also must overcome production issues that delayed iPhone X manufacturing at least a month over the summer. Production was later slowed by an imbalance in supply of key components for its facial-recognition camera.

"The biggest risk for Apple is the supply chain," said Raj Aggarwal, co-founder of Localytics, a mobile engagement firm. "Are they going to be able to fill preorders for the iPhone X? If they can, they're in good shape. If they can't, they're going to miss some numbers this year."

Some customers also experienced early glitches in the ordering process Friday. In the U.S., some consumers weren't able to log onto Apple's store to place orders for roughly 10 minutes after the advertised start time. Some customers world-wide later received reservation or confirmation numbers but no follow-up emails regarding their orders.

Analysts expect Apple to provide more clarity on both supply and demand for the iPhone X when it announces earnings Nov. 2. More preorders of the iPhone X than the iPhone 8, which starts at $699, would be encouraging for investors, especially after reports of weak iPhone 8 sales.

The iPhone X launch comes as Apple aims to shore up its position as the world's second-largest smartphone maker behind Samsung Electronics Co. Competition from lower-priced smartphones in China helped reduce its share of the global smartphone market to 14.5% last year from 16.1% in 2015, according to market research by Strategy Analytics.

Despite that, analysts are projecting strong iPhone sales this year because consumer loyalty is high and many consumers own older iPhones due for an upgrade. About 95% of iPhone owners who plan to buy a new device say they will buy another iPhone, according to UBS, much higher than the 53% of Samsung customers who say they plan to buy another device from the South Korean phone maker.

It is unclear if iPhone loyalists who plan to upgrade will choose an iPhone X, iPhone 8 or an older device. Some 40% of consumers who plan to purchase a new device in the next six months said they wanted to see the iPhone X at a store before deciding what model to buy, according to a survey by Creative Strategies, a tech research firm.

"A good portion of buyers don't have their mind made up," said Ben Bajarin, an analyst with Creative Strategies.

--Yoko Kubota and Takashi Mochizuki contributed to this article.

Write to Tripp Mickle at Tripp.Mickle@wsj.com

(END) Dow Jones Newswires

October 28, 2017 02:47 ET (06:47 GMT)