Apple iPhone Losing Loyal Customers, XR Demand Low

The new Apple iPhone Xs Max and iPhone X are seen on display at the Apple Store in Manhattan, New York
The new Apple iPhone Xs Max and iPhone X are seen on display at the Apple Store in Manhattan, New York, U.S., September 21, 2018. REUTERS/Shannon Stapleton (Photo: SHANNON STAPLETON | Reuters)

Apple is losing so-called fanboys. iPhone XR sales and queues last Friday imply that even Apple's most loyal customers are no longer as excited for the company 's offerings anymore.

Apple just launched the iPhone XR at 3 AM on October 19, Friday morning. Instead of the usual fanfare, this event brings, with loyal and new customers lining up to get the latest premium offerings of the company at that wee hours, morning came with nearly all the models unsold, according to MacWorld

This was both unexpected. Loup Ventures analyst Gene Munster expressed his surprise that the iPhone XR, considering it to be the newest budget-friendly generation and therefore, the most exciting model this year, did not sell out. 

Forbes also reported finding it weird that up until now, three days after the launch, every capacity and color of the iPhone XR model are still available on the Apple website. The news site doubts that Apple produced so many units that this has happened. Instead, the site claimed that this has never happened once in the past 11 years and Apple itself reported to have experienced production problems that the XR was delayed a full month behind the iPhone XS and XS Max.

However, the lackluster reaction of consumers to the XR can also be expected if the lines for XS and XS Max are to be considered. Apple usually experiences its customers waking up early morning to put in a pre-order so that they can get their hands on the new phones when they are launched on the first day. However, this year, lines outside of Apple stores for the XS and XS Max were much shorter. It seems that the iPhone XS and iPhone XS Max did not attract the usual fanbase. 

Analysts from Citi also claimed that this is entirely expected. Based on Google searches that it analyzed earlier this week, searches for the phones were not their usual level. In their note, they wrote that each year, spikes for web searches could be observed after the launch event. However, "We also see the momentum has been decreasing over time," the analysts also wrote. 

The explained that the market is already maturing for Apple. Customers are no longer as excited for each generation of iPhone, unlike in the past when launches were a cause of frenzy. They also explained that this trend might have to do with a slowdown on Apple's part, in terms of innovation. Saturation is also considered as an issue. 

The Citi analysts, however, were not wholly pessimistic about Apple's growth and sales. It has claimed that the slowdown in search traffic can be blamed on many factors, so it does not necessarily mean iPhone sales will decrease. They also argued that they were not expecting a complete 360-degree turn on iPhone demand. Instead, "single-digit unit growth of iPhone" can still be manageable.

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