After ten years, the ‘iPhone killer’ finally emerges

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After ten years, the ‘iPhone killer’ finally emergesWhen Apple first launched the original iPhone back in 2007, every rival smartphone maker and many industry experts had the same cavalier response: the iPhone is dead on arrival, they exclaimed. A few short years later, the iPhone left a string of dead industry giants in its wake, and changed the smartphone industry in a way best seen using a visual aid from the Apple v Samsung court battle. Credit: Apple, Inc.Since the launch of iPhone just over a decade ago, we’ve heard tale after tale of imminent “iPhone killers,” phones that would launch and finally end the iPhone’s reign of terror. Consumers wouldn’t care about the iPhone anymore, and attention would instead turn to one of these exciting new phones.Most iPhone killers fizzled out as quickly as they appeared, like the Palm Pre and, most recently, the Essential phone. Others like the Motorola Droid sold pretty well and even stuck around for a few generations, but they didn’t come anywhere close to toppling the iPhone. In fact, they didn’t even put a dent in iPhone sales. But now, in 2017, there is finally a new smartphone that has had a real impact on iPhone sales. In fact, the world’s leading prognosticator on all things Apple expects this new phone to have such a serious impact on iPhone sales that Apple will have to make massive adjustments to iPhone production because of it.So, what is this iPhone killer that has finally managed to topple one of Apple’s iPhones? It’s… an iPhone.KGI Securities analyst Ming-Chi Kuo is by far the most reliable source of information when it comes to Apple’s plans surrounding unreleased products. He has a number of sources in Apple’s supply chain, so he also often sheds light on Apple’s production plans in his research notes to clients.Kuo’s research note this week identifies iPhone X demand to be far stronger than Apple had anticipated. Apple is reported to have ordered an increase in iPhone X production by between 35% and 45% for next quarter, which is incredible when you consider the company’s new tenth-anniversary iPhone breaks the thousand dollar price barrier.But there’s more to Kuo’s latest report. It appears as though the iPhone X’s success is coming at the expense of the iPhone 8. According to the analyst’s latest note, Apple is expected to cut iPhone 8 production a whopping 50% and 60% from the December quarter to the March quarter because there’s hardly any demand. The only phone that has been able to put a real dent in iPhone demand is another iPhone.Meanwhile, Kuo says iPhone 8 Plus sales have actually been slightly above expectations. In other words, Apple’s $1,000+ iPhone X has killed demand for the lowest-priced iPhone 8 models, but the pricier iPhone 8 Plus is still selling better than expected.Remember a couple of years ago when half of Wall Street was crying that Apple would be doomed unless it started selling much cheaper iPhone? Good call.About Dana Love: I am currently co-founder and president of Feedback Networks, where my responsibility is the merger of product, technology, and engineering of Feedback’s socially-aware, AI-powered big data services to media companies. I hold a PhD in economics, an MBA in management and marketing, and a BS in physics. My research is in public policy, most recently the impact of blockchain and big data on emerging economies. My work in big data, machine learning, blockchain, and VoIP has been written about in Wired, Oracle’s Profit Magazine, the Financial Times, and Telephony Magazine.
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