Will Apple’s iPhone 6/Plus ruin Christmas for retailers?

“Holiday spending accounts for about $600 billion a year, or nearly a fifth of retailers’ $3.2 trillion in annual sales, according to the National Retail Federation,” Brett Arends reports for MarketWatch.

“The NRF is predicting a significant jump in holiday spending. It reckons sales will be up 4.1% this year, the strongest growth since 2011 and way above the average this millennium,” Arends reports. “But is there a Grinch lurking in the hills high above Whoville? There may be: A Grinch in the shape of a giant iPhone.”

“That, at least, is according to some new research by analysts at Canaccord Genuity,” Arends reports. “Their take: Spending on new iPhone 6 and iPhone 6 Plus phones from Apple is going to vacuum up so much of consumers’ money that the rest of the retailers may be in for a much tougher time than they realize.”

Read more in the full article here.

21 Comments

  1. It will only harm retailers trying to sell cheap crap, because the only people that would buy that stuff are people without a lot of money but they spent it on an iPhone. Higher end items will still sell to people who can actually afford their phones because it was appropriately budgeted and planned.

    1. Nice to see someone get to the heart of the matter. These people had no business buying iPhones in the first place. Me personally, I wouldn’t own an iPhone if I couldn’t comfortably afford to buy it at the full non-contract price. We have way too many people living beyond their means today. You shouldn’t need to mortgage your future for a smartphone.

  2. How stupid can articles get? Do they really think everyone is buying iPhones? There’s still lots of other things to buy, like home appliances, clothing, jewelry, TVs, etc. Someone is always trying to place blame on Apple, no matter what the circumstances. It seems before the iPhone 6 came out, there were those saying no one will be buying iPhones because the Android smartphones are better or cheaper or more abundant. Now they’re claiming the iPhone will be hurting retailers.

    I’ve heard that any Apple retail store is an anchor in a mall and it actually attracts shoppers to go into other stores. They can’t have it both ways. The base iPhone 6 cost no more than any other flagship smartphone, so I doubt it’s going to break anyone’s pocket. I would think that buying something like an Xbox One, Playstation 4 or a high-end smart-TV would suck up more consumers’ money than an iPhone. Blaming Apple’s iPhone 6 for ruining retailers’ holiday revenue is ridiculous.

    1. That is NOT what the article said. The article said that, even though the Christmas spending of an average American will be higher than last year, it is likely that all that increased spending will go to Apple. If you spent $1,000 for your Christmas shopping last year, $100 of which was for Apple gear, the article suggests that you will be spending $1,041 this year, but out of that, more than $141 will go to Apple. Last year, retailers other than Apple got $900 from you. This year, they may get less, even though you’ll be spending more. I’m not sure where in the article was it suggested that “everyone will suddenly buy iPhones” and that they won’t be buying jewellery, TVs, clothing, appliances… 4% of someone’s spending isn’t much per person, but it translates to millions for retailers. If those 4% end up going to Apple instead of getting spread across other retailers, this will be a sad Christmas for every retailer not named Apple Store.

      Is this clear enough?

  3. Umm, ok, so why is this year any different than previous years? Or, are they saying, previous Android customers spent their Xmas bucks on an iPhone? How significant can that be in total holiday shopping sales?

  4. Apple the Grinch. So it begins, again, the dreary cycle of hit pieces that never let up, scraping up page views and button clicks for a living, as if only scandal and sensation fuel the internet. Oh wait…

  5. Baloney.

    With the new installment plans the outlay is minimal.

    True, tax is paid up front, but that is far less than the $299 you would have had to pay inthe subsidized (plus the proportionate sales tax). I see this as a precursor for the WS shysters to say that sales of the iPhone were not as expected since other retailers do not see sales dips. That is until Apple reports astronomic numbers. Meantime between Christmas and January 27, the shysters will have free rein in manipulating the stock and clean-up in the options market.

    1. Additionally, when the carriers started the installment plans, the shysters said this was the death knell for Apple. Instead the opposite happened. Without the big cash outlay required by the subsidized plans, families were buying more units (providing their kids with an iPhone too).

  6. One thing for sure, jouranalist and analysts are in full swing once again to try to ruin Christmas, peace on earth for everyone.

    Got to say the onslaught looks good.

    Don’t mince words with the headline: “Will Apple’s iPhone 6 ruin Christmas for retailers?”

    Pay no attention that Apple happens to be a retailers. Don’t ruin the onslaught with facts.

    Needs a little editing, let’s adjust it: “Is there a Grinch lurking in the hills high above Whoreville?” There definitely is, in the shape of a monstrous Grinch war monger, just look to the ones that shape water boards into implements of torture and you’ll get a pretty good idea of who who who is threatening civilized who who who ville.”

    Pay no attention to the irrelevant smoke and mirrors and especially the scent of the FUD farts: “The Justice Department says smartphone encryption by Apple will hinder police investigations.”

    Just realize Grinch journanalist that the Grinch was transformed because he still had a heart. Here’s hoping you still have one.

    1. Several readers here don’t seem to understand what the article is trying to say.

      Based on the estimates of experienced professionals, overall total spending over this Christmas season is expected to rise by 4.1% from last year. This would be great news for ordinary retailers (and we are NOT lumping Apple in this group; read on to understand why). However, since Apple is also a retailer with plenty of physical, as well as a major online store, Apple is also receiving a share of that $600B Christmas season retail cake. The article is saying that Apple’s share of that Christmas increase will be significantly greater than the other retailers’. In other words, it is entirely possible that the 4.1% growth in Christmas spending may all go to Apple, and the rest of the retailers won’t see any improvement over the past year.

      In other words, if an average American consumer spent $2,000 last year, out of which they spent $200 on Apple gear, this year, they will spend $2,082, but the article estimates that out of those $2,082, they will spend $282 (or more) on Apple gear (leaving less of their Christmas spending for other retailers).

      For consumers, this doesn’t mean much (other than they are showing higher intelligence by spending more on Apple, rather than cheap crappy competitors). For retailers OTHER THAN Apple, this is bad news, since they get a smaller share of that Christmas spending.

      TO me, this seems quite clear, and the journalist makes a lot of sense. As for who is the Grinch here and to whom, this is entirely another story.

      1. As usual a thank you for your thoughtful post. Let me say you did express it more eloquently than the hyped up article but hey, that’s what makes this place so great, the insight of the MDN community. Yes the concept is valid and there is some great info in the article, I did not intend to overly trash it, just shake my head at the desperation of hype and the attempt to validate a certain propaganda.

        I’ll take you up on your conclusion that points to another story. I’ll propose a slight different version of the Grinch. I’ll do this by swapping their values onto the community of Whoville. To do this effectively requires changing some name changes so once upon a time there was this community called Heelville. Heelville stores and Heelstores were great spots at Christmas and the sales were always hot. Oh the stuff they sold…

        Holed hot pails that squeaked when leaked.
        Bombastic booms base blasting beat batteries.
        Macrohard mass assembly required with friends to use.
        Additions, options, plans, so many contraptions to peruse.

        That is the way that it was until the advent of the Grouk.
        Everyone laughed at the Grouk when it first came to town.
        The Heelstore in Heelville realized that they did not want it around.
        They wallowed the wallows and the weeping trees they shook.

        They rattled the Grouk, gave it the mop.
        But the Grouk took to a cave near a brook.
        Settled down outside of town and set up shop.
        Made some gadgets and wrote a good book.

        Heelmarket laughed when the gadgets first came to town.
        Nothing like the grand stuff that Heelville had around.
        No attention was paid, until more gadgets were made.
        Heelville store cried out again, they whipped the Whipaplaid.

        No one laughed Christmas day when Heelville had it under their tree.
        The greatest of Grouk gadgets that could ever be but not apparently.
        It was simply the book that the Grouk wrote by the brook.
        It was book that took proper spelling, and suddenly all of Healville could now see…

        That sounds like a good end for now.

          1. Thanks predrag, what can I say it just flowed plus I like Dr. Seuss. Don’t worry I’ve kept the post might regurgitate it at some point in the future should the opportunity arise.

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