Why the iPhone XR Isn’t More Popular

2 minute read
| Editorial

Something is happening with the iPhone XR. No one except Apple knows for sure what the sales numbers are relative to the XS family. But interesting questions are being posed.

iPhone XR in black, blue, and silver

Apple’s iPhone XR. Second best was too late?

It all started with rumblings from the supply chain. When this happens, cooler heads point out that sporadic, isolated Apple cutbacks in production can’t be taken as sound indicators that a model is in sales trouble. Tim Cook has told us that on several occasions. And sober analysis sets us straight. Again, “Analysts: iPhone Sales Panic is ‘Overblown’.”

And yet, something seems to be going on with the iPhone XR. “Goldman Sachs downgrades Apple for 2nd time this month, warns Apple may have ‘miscalculated’ iPhone XR pricing strategy.” Goldman Sachs analyst Rod Hall wrote:

In addition to weakness in demand for Apple’s products in China and other emerging markets it also looks like the balance of price and features in the iPhone XR may not have been well-received by users outside of the US.

Two things to note here. Analysts have to depend on indirect data and then make some assumptions. Secondly, how other websites size up those reports depends on the editorial slant: click-bait or professional analysis.

However, there comes a time when little bits of evidence keep cropping up, and then it’s useful to ask interesting questions.

iPhone XR Questions

Some of those questions were properly posed by John Gruber. Gruber admits, for starters,

Demand for iPhone XR may well be weaker than Apple and analysts expected. I don’t know. But I will say this: you can’t judge this from poor-mouthing from Apple’s Asian suppliers.

But there’s still some smoke in this iPhone XR affair. Goldman Sachs looked at sales weakness in China and other emerging markets, not supply chain cutbacks. That opens the door to some informed speculation. Gruber has a theory.

What people don’t seem to be considering is that maybe the iPhone XR is less in demand not because it offers too little compared to the XS, but rather too much.

That is to say, customers in 2017 had a choice between the Touch ID of iPhone 8 and the more exotic iPhone X. This year, customers were confronted, first, with a dramatic rollout of the iPhone XS/Max and the less spectacular XR drifted in a month later. Yes, there were many informed customers who were eager to pay less, but there were also many for whom the forced change to Face ID was an uncomfortable change. They passed.  In addition, if the fraction of those Apple estimated would wait  turned out to be too small, the XR sales would suffer accordingly.

A Mix of Customer States of Mind

It all boils down to the fractional makeup of various customer mental states. For example, my own theory is that there was a segment, larger than expected, for whom waiting for second best was not an option. Plus, as Goldman Sachs surmised, the XR price was still too high for emerging markets. A double whammy.

It’s a complicated mix of customer attitudes and global markets. If one is skewed by customer irrationalities, finances, or ignorance, the iPhone product sales mix can be different than estimated. Gruber notes:

But consumers aren’t objective and often aren’t particularly well-informed.

Over the last decade, Apple has shown great mastery in understanding what customers want in the iPhone. But, given how (we believe) technical difficulties with the XR display caused a delay in the rollout, Apple’s hand was forced. And since Apple doesn’t report unit sales numbers anymore, we’ll never know the real impact. If anything ,however,  the discussion has shown us what Apple has to deal with each year.

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Old UNIX Guywab95John Martellarogeoduck Recent comment authors

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Old UNIX Guy
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Old UNIX Guy

My wife and I recently upgraded from our almost five year old iPhone 5S’s … she got the 8 Plus and I got the 8.

No stinking way am I pay $1,000 for a phone, Tim Cook. If the XR had been more reasonably priced, it might’ve enticed me … but I’m not a fan of the gigantic phones either.

I think that $599 (mine) and $699 (my wife’s) was overpriced, but at least I didn’t feel like I had been robbed blind.

Old UNIX Guy

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Peter Hooper

$1K? Made of Glass? Compulsory Face Recognition? No. I’ll pass.

wab95
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wab95

John: The more I read analyses, whether technical, political or academic, the more I’m convinced that the capacity for deep thought and the integration of disparate but relevant and related facts, ideas and insights even within a given discipline, let alone across disciplines, is both precious and uncommon. Thankfully, both thoughtful analysis and discussion are commonplace at TMO. To some extent, our deep thought desert may be mediated by how our brains work, namely pattern recognition of immediate threats and opportunities in our immediate environment necessitating an immediate response. Evolutionary fitness has conditioned us to expend no more energy than… Read more »

geoduck
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geoduck

I agree, it’s likely launching the top end model and then the economy version later wasn’t the best idea. Not only did it look a bit lame in comparison, but there would also be a bit of impatience. “That XS looks awfully good, but I wanted to wait for the one I know is cheaper, aw heck, let’s just get an XS now.” Both would have cut into XR sales. However there is another factor as well. Since summer many economic signs have been suggesting rough times ahead. The markets are down. FANG stocks especially are hard hit. There’s more… Read more »

skipaq
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skipaq

I use iPhone 6 and my wife uses the 6s. It would cost nearly $2000 for both of us to upgrade. Are phones are working fine. It is hard to justify such a cost when there is no real need. We would go with the Xr if we upgraded. You probably have seen the offer Apple of an extra $100 on trade ins of older iPhones like ours. That brings the cost for us to upgrade closer to $1500. Still not convinced. Perhaps this offer is just another piece of evidence of softening in sales. In that it comes directly… Read more »

geoduck
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geoduck

We’re in the same boat. Thought about updating, but aren’t going to. My wife has a 6 and I have an SE. To replace both would be in the ~$2000 range. (Side note, yes we could get a 7 or an 8 for less. But those are old technology and will go obsolete and stop getting updates that much sooner. When we do update we want the latest which will last longer.) We thought about updating but just can’t justify it. If we could do it for ~$1000 we might, but the phones are working and until that stops we… Read more »

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Peter Hooper

Exactly. I cannot see how any phone could be more effectively useful at a very high end than the iPhone 6+. The only way to get many users to upgrade will finally to force them to by built-in faults or applied obsolescence through software “upgrades” which break the phone’s usability.

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eddychik

Smaller iPhone ( i.e the iPhone SE , 8 ) tends to be much more popular in Japan, while the larger 5.5 / Max tends to be popular in China.

Xr is in the middle of no where. It is too small for majority of Japanese Market, Not big enough for majority of Chinese Market. And the market is taking its time to adjust for the size changes.

And in case people are thinking that is just two market, the Chinese Region and Japanese together represent more than 30% of Apple Shipment.