Reasons for Slow Sales
Apple’s iPhone 8 is expected to be the first iPhone to sell less than its previous version. This prospect is based on the iPhone 8’s competition with the iPhone X, the aging of the brand and offensives by Apple’s competitors. The Korean telecom industry’s anticipation is less than before even ten days before its launch.
According to foreign news media including Bloomberg, the iPhone 8's monthly sales are expected to reach 5 million to 6 million units only. Considering the fact that the monthly sales volume of the previous iPhone 7 was 13 million units, it is a poor sales performance. It was recently known that the company cut its iPhone 8 parts orders by more than 50 percent.
There are four reasons behind the iPhone 8’s sluggish sales. The first reason is an internal sales competition among the iPhone 8, the iPhone X and the iPhone 7. Unlike the iPhone 8, the iPhone X is loaded with new technologies such as a face recognition sensor and an OLED. At the moment, consumers’ eyes are on the iPhone X which will be launched in the US among others on November 3.
"The iPhone X will potentially hamper the sale of the iPhone 8," said Daniel Gleason, an analyst at market research firm Ovum. "Consumers are likely to postpone their decisions about which new product to buy after the launch of the iPhone X."
The iPhone 8 is also competing with its previous version, the iPhone 7 launched last year. "The iPhone 8 made meager progress, prompting consumers to choose the comparatively cheap iPhone 7 which is not bad in terms of performance compared to the iPhone 8," said John Bean, an analyst at investment banking firm Keybanc Capital Market.
The second is the aging of the iPhone brand. The history of the iPhone began in June 2007 when Apple founder Steve Jobs announced the iPhone original. Over the next decade, an iPhone fever gripped consumers across the globe, taking the lead in the popularization of smartphones. The iPhone is still the strongest brand. However, it has also been pointed out that there has been no innovation in recent years. “The iPhone is losing its freshness as a new version has become just a slight improvement from its old version,” Newsweek said, "A shorter row of people who wanted to buy the iPhone 8 on the day of the launch of the iPhone 8 suggest this change."
The third is an extension of the smartphone replacement cycle. A global smartphone replacement cycle increased from 24 months in 2014 to 29 months in 2016. As smartphones have advanced enough, consumers' desire for better performance has diminished.
Fourth and finally, premium smartphone competition is intensifying. Samsung Electronics succeeded in selling two strategic products such as the 'Galaxy S8' and the 'Galaxy Note 8' this year, and Huawei chased Apple with a 0.7% p gain in the second quarter with a market share of 11.3%. Richard Yu, CEO of Huawei, recently attacked Apple in a "Mate 10" launch event, pointing out a problem of the iPhone X’s face recognition.
As many consumers were disappointed with the iPhone 8 abroad, the Korean telecom market is also lukewarm about the launch of the iPhone 8 in Korea ten days away from now. "It is expected that many iPhone fans will pre-order the iPhone 8 in its pre-order period because there is no time set for the Korean launch of the iPhone X," a representative of the Korean telecom industry. “However, as there is a small difference in performance between the iPhone 7 and the iPhone 8, it will be quite a challenge for the iPhone 8 to make a smash hit in the Korean market.”