The iPhone 8 line may be Apple’s latest and greatest, but so far has not kept up with older, better-selling sibling, the iPhone 7.
Carrier store surveys conducted by KeyBanc Capital Markets suggests the iPhone 7 handsets are bucking history by outselling the iPhone 8 and 8 Plus. Several respondents claimed the iPhone 8 models were not enough of an upgrade, while others are waiting to compare the 8 to the iPhone X. The iPhone X will ship next month.
Reuters broke the story about weak demand for the iPhone 8 models Monday morning. The news service also reported U.S. wireless carrier AT&T said upgrades were fewer by nearly 900,000 from a year ago.
Apple rolled out the iPhone 8 line in September and announced the coming iPhone X, which will retail starting at $999. The iPhone 8 runs $699, but customers may be attracted more to the price cut on the iPhone 7, which retails for as little as $549 with some carriers.
“Many respondents indicated that a meaningful portion of customers are buying iPhone 7 in lieu of the new iPhone 8, given the lack of significant enhancements on the new phone,” according to a client note written by KeyBanc analyst John Vinh.
Vinh also speculated the sales lag could partially be from U.S. carriers not promoting the iPhone 8 line as aggressively as they had the 7 series.
One investor told Reuters he was not concerned with lagging sales given anticipation for the iPhone X, which has an edge-to-edge display, a glass and steal housing and a front camera that uses facial recognition software to unlock the phone.
“Any small down-tick in margins from the sale of the iPhone 7 or 8 is wrong-headed as iPhone X is really the flagship device where we’re going to see a strong upgrade cycle,” Jason Ware, chief investment officer of Albion Financial Group, said.
KGI’s Securities Ming-Chi Kuo told investors last week that iPhone 8 sales were better than expected, but expected the launch of the iPhone X to trigger a “super cycle” in year-end sales.