Apple selling less iPhone XRs than projected, but can make up for it with iPhone XS sales – BGR

Widely respected Ming-Chi Kuo analysts writes that sales of Apple's new iPhone XR are just below expectations, corroborating a handful of previous reports we've seen over the past few days. In a new investor note obtained by MacRumors, Kuo lowered his estimate for the iPhone XR sales by upwards of 20% for the current holiday quarter.

Now is this reason to panic? Not necessarily. To this point, Kuo articulates that lower demand for the iPhone XR can be offset – in a financial sense – by sales of Apple's pricier iPhone XS models. Indeed, Apple's most recent quarterly report that Apple – with more margin friendly devices in the mix – can easily generate more sales in the face of stagnating iPhone sales.

Specifically, iPhone sales stagnant while revenue from iPhone sales jumped by a whopping 29%. In other words, whether or not iPhone XR is more likely to be irrelevant as long as Apple is finding ways to boost revenue, which is clearly more important than any other specific model.

All told, Kuo believes cumulative iPhone sales for the quarter will remain steady, with a different mix of iPhone XR and XS sales as expected. To this end, income may be higher when all is said and done.

Kuo's note reads in part:

We have reduced our iPhone XR shipment estimation from 100mn units to 70mn during the new product lifecycle (4Q18-3Q19) for the following reasons: 1) Negative impacts on consumer confidence from the trade war, especially in the Chinese market, 2) expectations from more users for more affordable, and 3) competition from Huawei's Mate 20 series.

While Kuo may be right about the iPhone XR sales, it seems a bit off. I can not really imagine many prospective iPhone XR buyers being hesitant to pull the trigger because the device lacks a dual-camera and sports slightly larger bezels. One factor that has not been widely discussed is that Apple's advertising campaign for the iPhone XR practically seems non-existent. With Apple already in full swing, it will be interesting to see if Apple embarks on a huge iPhone XR marketing push over the coming weeks.

Image Source: Zach Epstein, BGR