Citi: Thinner lines, quicker ship times mean Apple’s iPhone 8 sales will fall short

“Apple’s rollout of two major iPhone models this year may cause short term issues for the company, according to one Wall Street firm,” Tae Kim reports for CNBC. “Citi Research lowered its earnings and sales estimates for the Apple’s September quarter, predicting lower than expected demand for the iPhone 8 will cause the company to miss the Wall Street consensus.”

We are reducing our F4Q17 (Sept) to reflect more modest iPhone 8 and 8 Plus demand. Checks in US/Europe indicated similar demand patterns to those observed in Asia and Australia… i.e. modest crowds but definitely thinner than in the past while ship times for the devices ordered online were also quicker… We are not surprised that current ship times are quicker and lines shorter than prior launches, as we believe users will wait to compare to iPhone X before making a final purchase. — Citi analyst Jim Suva

Kim reports, “Suva reiterated his buy rating and his $170 price target for Apple shares, which is 12 percent higher than Friday’s close.”

We do expect volatility ahead as consensus estimates calibrate to a lower than expected September quarter given slightly more tempered demand ahead of iPhone X launch (Nov 3rd) coupled with supply constraints for iPhone X… We believe Apple can return to sustainable growth post iPhone X. We see growth opportunities in Services (in-app purchasing, Apple Pay, iCloud, Apple Care, etc.) and India, aka Applewood, as underappreciated… Despite the outperformance this year, shares remain attractively valued relative to the market and can undergo sustainable multiple expansion. — Citi analyst Jim Suva

Read more in the full article here.

MacDailyNews Take: As we’ve predicted since Day One:

You know, we’re not convinced that Apple will be overrun with iPhone 8/Plus preorders. Yes, use the App Store app, in case, but it might be an easier night than you think. In fact, Apple just might have a problem on their hands, judging by the early results of our online poll. It’s early, but we expect Apple to market the living you-know-what out of the iPhone 8/Plus because, next to the iPhone X, it’s looking like a tough sell.MacDailyNews, September 14, 2017

Since the U.S. carriers are already offering iPhone 8/Plus promotions, Apple seems to have planned for the expected reaction to iPhone 8/Plus with iPhone X looming over them.

Analysts: Users are passing on iPhone 8/Plus, waiting for iPhone X instead – September 20, 2017
Associated Press reviews iPhone 8/Plus: Like flying in coach versus first class iPhone X – September 19, 2017
USA Today’s Baig reviews iPhone 8/Plus: Excellent iPhones overshadowed by iPhone X – September 19, 2017
Sprint follows AT&T with free iPhone 8 offer for trade-in – September 18, 2017
Why you might get a deal on a new iPhone after all – September 18, 2017
AT&T fires first shot in iPhone price war with buy-one-get-one-free offer – September 13, 2017


  1. Not necessarily likely but it’s possible Apple judged demand better this year and had more phones available for launch. I have not seen this scenario discussed. This is congruent with Cook being “thrilled” with early results.

  2. When UPS was recently delivering the three iPhone 8’s that I bought, the driver asked me if the boxes I was signing for were iPhones. I said they were. He told me his truck was full of them and he had been delivering them all over my Seattle neighborhood all morning. So anecdotally, sales seem very strong in my city. The lack of lines may be more indicative of better supply chain management this time around.

    1. There’s two reasons why there’s not lines. One, you don’t need to be in one to get one on day one anymore. Just order online and have it shipped to your house. Two, for those… ahhh… groups that were looking to buy a lot of phones all at once, instead of paying people to stand in line to by two at a time, they have been urged to go through the business channels.

      So, the ONLY people that would be in a line would be those that don’t have a way to buy online.

      Actually, no, we know that the way companies make money is by not having enough product on shelves making it SEEM desireable by it’s lack of availability. SO what this REALLY means is that Apple shipped too many iPhone 8’s and 8 Pluses. They’re not SELLING out, Apple is just having them shipped back to the warehouse so the shelves can LOOK empty.

      Then in a month they’ll be on the shelves again. Yes, that’s absolutely how business works.

  3. …. and let it begin, the financial analysts will grab at any anecdotal evidence or if none available, make it up, to try and bring AAPL lower. Why?

    Because their masters demand that they get real friction in the market and force investors to sell and then buy back AAPL, just so they can get their transaction fees!

    Long term investors know this, disregard all the noise and await the total iPhone’s sold numbers released by Apple inc. at their next quarterly update; whatever the mix of 8 and X, it will be a huge number!

    1. This is the greatest number and broadest price variance of any iPh line-up. This is good to reach those more budget minded, through to the “Porsche-minded.” This also means there will be dilution of sku sales, but there’s no indicator over all sales, or margins will me challenged. B/c of the iPh X manufacturing issues, the only real concern imo, is how this qrt/Q1-18 will stack. For those holding AAPL for the short term, I’ll guess the “pop” isn’t going to be what it could have been. Beyond that_one big yawn for tech news creation.

  4. Thinner lines and shorter shipping times! Is this the best financial model Citi Research’s could come up with to evaluate product launchings?

    Isn’t it possible Apple has actually gotten better at product launchings. Logistics is Tim Cooks expertise.

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