We all know the drill: Each year, Apple introduces a new iPhone, and eager buyers rush to pick it up.
At least, that's how it normally goes. But this year, the older model iPhone 7 is enjoying a new sales bump while the new iPhone 8 line isn't flying off shelves at the pace of its predecessors, according to an analyst report Monday.
The iPhone 7's sales are stronger than they were for the iPhone 6 when the iPhone 7 came out, according to the report by KeyBank Capital Markets analyst John Vinh. The report was based on surveys from carrier stores.
Apple declined to comment on the report.
At first blush, it seems odd that an older phone would get a sales boost when there's a new phone out there. But it makes sense for a few reasons. The survey results indicate that more people are interested in buying older iPhones at a cheaper price than in the past. The iPhone 7 just got a price cut, which works for people opting to pass on paying more for the new iPhone 8 features such as wireless charging or the upgraded camera.
The trend around the iPhone 7 appears to reflect a broader notion that consumers aren't upgrading to the latest smartphone as frequently as they have in the past, perhaps because fewer must-have features are being added to each generation. Analysts have been signaling this upgrade shift for years, as growth in the smartphone market has slowed. AT&T reported last week that it saw “nearly 900,000 fewer handset equipment upgrades” in its third quarter this year, compared with last year.
The iPhone 8 also has the added challenge of sitting in the shadow of the upcoming iPhone X, Vinh said. “Feedback from stores indicates customers are waiting to purchase the iPhone X or to compare the iPhone X before buying the iPhone 8,” he wrote.
Apple used to release sales numbers for the first weekend that new phones went on the market, but the company stopped the practice with the iPhone 7 in 2016. The firm told the Wall Street Journal that those numbers weren't as relevant anymore, as its phones often sell out — in other words, sales were largely driven by how many phones it could make rather than how many people wanted to buy. The company is expected to give investors clearer numbers on how the iPhone 8 and iPhone 8 Plus are selling on Nov. 2, when it reports its latest earnings.
What is already clear, though, is that Apple's decision to launch a premium phone above the iPhone 8 and 8 Plus is shaking up how consumers are looking at new iPhones this fall.
Still, we won't get a full picture of whether Apple fans want to upgrade this time until the iPhone X comes out Nov. 3 and the full slate of smartphones is on sale. For now, the slowing iPhone 8 sales are just a trend to flag, rather than cause for full-scale panic, analysts said. “We view this trend as modestly worrisome,” Vinh wrote.