Mobile analytics software vendor Localytics (via MacRumors) just shared some data showing the adoption of Apple's (NASDAQ: AAPL) new iPhone 8 and iPhone 8 Plus as percentages of the overall iOS installed base.
This data is helpful because it can give investors a sense of the initial sales velocity of the new iPhones.
Per Localytics' data, only 0.7% of the iOS installed base migrated to Apple's new iPhones during the first weekend of the devices' availability. That's lower than the iPhone 5s, iPhone 6 series, iPhone 6s series, and iPhone 7 series, but considering that many potential iPhone buyers are holding off upgrading until the pricey iPhone X becomes available, this is hardly unexpected.
The big surprise is that the iPhone 8 Plus appears to have outperformed the iPhone 8 this year in a dramatic role reversal.
By the numbers
Apple began offering its iPhones in two sizes with the iPhone 6 series and has continued that practice with the iPhone 8 series. In the table below, I've included the first-weekend adoption rate data from Localytics.
The data yields some interesting insights. First, the percentage of the iPhone installed base that moved to the iPhone 8 Plus in the first weekend of availability is higher than it has been in any previous generation. This is even more noteworthy because the iPhone installed base has grown each year, so in terms of total units shipped during the first weekend -- if we assume the Localytics data is representative, of course -- the iPhone 8 Plus is dramatically outperforming its predecessors.
In contrast, the standard iPhone 8 has substantially underperformed both its predecessors as well as its larger sibling.
Positive implications for Apple
Some might look at this data and conclude that the iPhone 8 is a flop and that investor optimism going into this product cycle was wholly unfounded.
I think that's the wrong way to look at it.
What the data seems to say is that individuals who would've opted for a 5.5-inch iPhone in the past aren't really holding out for the iPhone X -- they're more than happy to grab the iPhone 8 Plus.
Intuitively, this makes sense. Customers that opted for the 5.5-inch iPhone models in the past are clearly fine with the form factor and value the improvements over the 4.7-inch models (e.g. better cameras, sharper displays, and so on).
They don't need to wait for the iPhone X, which will launch later and could also be in relatively short supply, to get those features.
The data also appears to show that users who would've been quick to adopt the 4.7-inch iPhone in previous years are waiting for the iPhone X to arrive.
Again, this intuitively makes sense. Users who bought the latest 4.7-inch iPhones in previous years probably weren't doing so to save some money, but simply preferred the more compact form factor – even if it meant giving up some of the nifty features that Apple introduced on the Plus models.
The iPhone X is a game changer for a lot of those users. It includes all the technology improvements that the 5.5-inch iPhone has plus some extras like a superior telephoto lens, Face ID, and a full-face OLED display but delivers that technology in a phone that has an iPhone 8-like physical footprint.
This data, then, seems to be overwhelmingly positive for Apple. It appears to suggest that most early 4.7-inch iPhone buyers in years past are willing to pay more to get more advanced technology if it fits in a relatively compact form factor.
If this analysis is correct, then investors should expect much of the upward mix-shift to the iPhone X this cycle to come from buyers who would've purchased the lower-priced iPhone 8 rather than the higher-priced iPhone 8 Plus (since, on an apples-to-apples basis, the iPhone 8 is $100 cheaper than the iPhone 8 Plus).
Moreover, the iPhone X unit shipment opportunity could be much larger for Apple than some may have expected if many of buyers that would've gone with the iPhone 8 (the 4.7-inch iPhones generally outsell their 5.5-inch counterparts) opt for the iPhone X.
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