AT&T recently revealed some of its Q3 data, and the carrier says it saw 900,000 fewer smartphone upgrades compared to the year ago quarter. A recent Bloomberg piece suggests that the AT&T drop in year-over-year smartphone sales could be a sign that the iPhone 8 isn’t doing so hot.
If the iPhone 8 had been a hit out of the gate, then I would have expected AT&T’s upgrade number might at least have fallen less dramatically.
It does mention that AT&T’s Q3 only included about a week of iPhone 8 sales which isn’t enough to make a judgment, and that the data includes all smartphones, not just iPhones (although it’s amazing to think about one smartphone model being able to influence an entire quarter of carrier sales in one week).
Another factor to consider is that more customers could be buying iPhones directly from Apple. With several unknowns, it’s difficult to know with any certainty what AT&T’s (or overall) iPhone 8 sales have been. Also, we have seen recent reports that suggest that the iPhone 8 is doing better than expected.
However, if AT&T’s YoY hardware sales drop is an indication that the iPhone 8 isn’t selling well, one possibility is that Apple has underestimated iPhone X demand.
While early surveys suggested that many consumers wouldn’t be willing to pay $1000 for a new iPhone, there is data that shows that consumers’ loyalty to Apple will overcome the higher prices. With a longer wait time than normal, interest and demand could be growing higher than expected for Apple’s premium flagship.
Another factor that Bloomberg shares is that the percentage of wireless customers upgrading smartphones each quarter has been declining over the last several years.
If iPhone 8 sales are down compared to expectations and iPhone X sales haven’t been underestimated, it could be a mix of the average consumer buying new smartphones less often with early adopters and tech enthusiasts waiting for the iPhone X.
One thing is for sure, we’ll know the answers to these questions in a couple weeks with Apple’s fiscal Q4 earnings call scheduled for November 2, just one day before the first iPhone X units ship to eager customers.
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