KGI: Larger-Sized iPhones Coming This Year Will Offset Weakening Demand for iPhone X in China

Weaker-than-expected demand for iPhone X in China has led market analysts to revise down shipments for the first half of 2018, but larger-sized iPhone models in the pipeline should see Apple grow its overall worldwide shipments year-on-year, according to KGI Securities analyst Ming-Chi Kuo, who shared the information in a new research report obtained by MacRumors.

kgi three iphones 2018

We revise down 1Q18 and 2Q18 shipments of iPhone X to 18mn units and 13mn units, respectively, lower than market consensus of 20-30mn and 15-20mn units. We expect iPhone X will go to end of life (EOL) around mid-2018 and that total life cycle shipments will be around 62mn units, lower than our previous forecast of 80mn units.

Two main reasons are given for the weaker-than-expected demand for iPhone X in China. First, in Q4 2017, consumers were willing to wait on average 10 months longer before replacing their existing phones, compared to shorter replacement cycles in the year-ago quarter. In Q4 2016, smartphone users upgraded after between 14 and 16 months of ownership, compared to between 24 and 26 months in Q4 2017. The numbers are said to be reflected in lower shipment forecasts by Chinese phone makers for the second half of last year.

The second big factor is said to be Chinese consumers' penchant for larger displays. According to Kuo, the notched design on the iPhone X isn't yet compatible with many popular Chinese apps, leading many customers to see it as offering less usable screen space than 5.5-inch iPhone Plus models. This confusion, coupled with the high price of iPhone X, is thought to have undercut replacement demand.

Despite the downward revisions in shipments for the first half of this year – and Kuo's moot point that Apple might end iPhone X sales in the summer – Kuo believes overall iPhone shipments will maintain year-on-year growth of 0-5 percent over the first half of 2018, mainly thanks to Apple's corrected supply chain share. However, Kuo thinks Apple's next product line-up will significantly improve competitiveness in the second half of the year, when Apple's "real super cycle" will kick in.

Kuo has previously predicted Apple will introduce three iPhones in 2018: an OLED model that measures in at 5.8 inches like the current iPhone X, an OLED model that measures in at 6.5 inches that will serve as a sort of "iPhone X Plus," and a 6.1-inch model that features an LCD display. Kuo believes all three models will be equipped with a full-screen notched design and TrueDepth camera system like the iPhone X.

We believe the addition of 6.5-inch OLED and 6.1-inch LCD iPhone models will boost Apple's market share in China, and that the US$650-750 6.1-inch LCD iPhone will make it easier for users worldwide to own a 3D sensing and full-screen design iPhone which offers an innovative user experience.

For these reasons, Kuo believes iPhone shipments will grow 5-10 percent year on year over 2018. Kuo's estimate is better than the market consensus of overall smartphone shipment growth worldwide, which is expected to experience between a 5 percent decline and 5 percent growth. As a result, KGI retains a positive outlook for the iPhone supply chain in the second half of 2018.

Related Forum: iPhone

Popular Stories

Apple iPhone 16e Feature

Apple Announces iPhone 16e With A18 Chip and Apple Intelligence, Pricing Starts at $599

Wednesday February 19, 2025 8:02 am PST by
Apple today introduced the iPhone 16e, its newest entry-level smartphone. The device succeeds the third-generation iPhone SE, which has now been discontinued. The iPhone 16e features a larger 6.1-inch OLED display, up from a 4.7-inch LCD on the iPhone SE. The display has a notch for Face ID, and this means that Apple no longer sells any iPhones with a Touch ID fingerprint button, marking the ...
iphone 17 pro asherdipps

iPhone 17 Pro Models Rumored to Feature Aluminum Frame Instead of Titanium Frame

Tuesday February 18, 2025 12:02 pm PST by
Over the years, Apple has switched from an aluminum frame to a stainless steel frame to a titanium frame for its highest-end iPhones. And now, it has been rumored that Apple will go back to using aluminum for three out of four iPhone 17 models. In an investor note with research firm GF Securities, obtained by MacRumors this week, Apple supply chain analyst Jeff Pu said the iPhone 17, iPhone...
apple launch feb 2025 alt

Here Are the New Apple Products We're Still Expecting This Spring

Thursday February 20, 2025 5:06 am PST by
Now that Apple has announced its new more affordable iPhone 16e, our thoughts turn to what else we are expecting from the company this spring. There are three product categories that we are definitely expecting to get upgraded before spring has ended. Keep reading to learn what they are. If we're lucky, Apple might make a surprise announcement about a completely new product category. M4...
iPhone 17 Roundup Feature 2

iPhone Design to Change 'Significantly' This Year

Monday February 17, 2025 7:09 am PST by
Apple is set to "significantly change" the iPhone's design language later this year, according to a Weibo leaker. In a new post, the user known "Digital Chat Station" said that the iPhone's design is "starting to change significantly" this year. The "iPhone 17 Air" reportedly features a "horizontal, bar-shaped" design on the rear, likely referring to an elongated camera bump. On the other...
apple launch feb 2025

Tim Cook Teases an 'Apple Launch' Next Wednesday

Thursday February 13, 2025 8:07 am PST by
In a social media post today, Apple CEO Tim Cook teased an upcoming "launch" of some kind scheduled for Wednesday, February 19. "Get ready to meet the newest member of the family," he said, with an #AppleLaunch hashtag. The post includes a short video with an animated Apple logo inside a circle. Cook did not provide an exact time for the launch, or share any other specific details, so...
Generic iOS 18

Here's When Apple Will Release iOS 18.4

Wednesday February 19, 2025 11:38 am PST by
Following the launch of the iPhone 16e, Apple updated its iOS 18, iPadOS 18, and macOS Sequoia pages to give a narrower timeline on when the next updates are set to launch. All three pages now state that new Apple Intelligence features and languages will launch in early April, an update from the more broader April timeframe that Apple provided before. The next major point updates will be iOS ...
iOS 18

iOS 18.4 Coming Next Week With These New Features for Your iPhone

Friday February 14, 2025 6:18 am PST by
The first iOS 18.4 beta for iPhones should be just around the corner, and the update is expected to include many new features and changes. Bloomberg's Mark Gurman expects the iOS 18.4 beta to be released by next week. Below, we outline what to expect from iOS 18.4 so far. Apple Intelligence for Siri Siri is expected to get several enhancements powered by Apple Intelligence on iOS...
Apple 2025 Thumb 1

Two of Apple's Oldest Products Are Finally Getting Updated This Year

Friday February 14, 2025 6:03 am PST by
Apple released the HomePod mini in November 2020, followed by the AirTag in May 2021, and both still remain first-generation products. Fortunately, rumors suggest that both the HomePod mini and the AirTag will finally be updated at some point this year. Below, we recap rumors about the HomePod mini 2 and AirTag 2. HomePod mini 2 In January 2025, Bloomberg's Mark Gurman said Apple is ...

Top Rated Comments

usersince86 Avatar
93 months ago
Some still prefer a smaller phone ... new processor for the SE, please!
Score: 23 Votes (Like | Disagree)
Rychiar Avatar
93 months ago
I don’t understand the appeal of a phone larger than the X. It’s like perfect size. My 7 plus isn’t exactly comfortable and I have huge hands. Do they all hold their phones with 2 hands over there?
Score: 19 Votes (Like | Disagree)
charlieasmith96 Avatar
93 months ago
('https://www.macrumors.com/2018/01/19/kgi-larger-iphones-to-offset-weak-iphone-demand/')

According to Kuo, many potential buyers are under the misapprehension that iPhone X's notched design means it has a smaller screen than 5.5-inch iPhone Plus models. This confusion, coupled with the high price of iPhone X, is thought to have undercut replacement demand.

The iPhone X does have a smaller screen by surface area than the iPhone Plus models. Why is this a misapprehension?
Score: 17 Votes (Like | Disagree)
apolloa Avatar
93 months ago
“many potential buyers are under the misapprehension that iPhone X's notched design means it has a smaller screen than 5.5-inch iPhone Plus models. This confusion, coupled with the high price of iPhone X, is thought to have undercut replacement demand. ”


I thought this was an actual fact and not a misapprehension???
Score: 16 Votes (Like | Disagree)
nfl46 Avatar
93 months ago
Weak demand for the X in general. ;)
If I were a company, I’d take Apple’s iPhone X weak demand over competitors. ;)
Score: 15 Votes (Like | Disagree)
1369281 Avatar
93 months ago
I would buy the iPhone X (again) if:
[LIST=1]
* It didn't have the notch. This is a big deal. It looks stupid. I don't care what any of you fanboys say.
* Face ID could be disabled in favor of Touch ID. I'm not cool with the FaceID lasers burning my retinas with its IR lasers every time I'm using my phone.
Score: 14 Votes (Like | Disagree)