"This Is Very Rare" - Apple Slashes iPhone 8 Supplier Orders By 50% As Demand Dries Up

Following reports this morning that channel checks show iPhone 7 outselling iPhone 8, Taipei-based Economic Daily News reports that orders for iPhone 8 and Plus have been slashed by around 50% for November and December, citing an unidentified official at the supply chain.

As we detailed earlier, a new report by KeyBanc Capital Analyst John Vinh, channel checks have revealed that Apple"s older iPhone 7 models are outselling the recently launched iPhone 8 ahead of the early November debut of the premium iPhone X.

As traditionally new editions of the iPhone have sold quickly as fans queue for the latest upgrade, this time it"s clearly different...

 As pent up demand for the iPhone X is clearly cannibalizing sales, and the surveys add to signs that the iPhone 8 is not proving as popular as its predecessors.

"Many respondents indicated that a meaningful portion of customers are buying iPhone 7 in lieu of the new iPhone 8, given the lack of significant enhancements in the new phone," Vinh wrote in his research report, which relied on channel checks in the United States and United Kingdom.

"Feedback from stores indicate customers are waiting to purchase the iPhone X or to compare the iPhone X before buying the iPhone 8," wrote Vinh, who is rated four out of five stars by Thomson Reuters StarMine for his recommendation accuracy on the Apple stock.

Another reason for the slow uptick of the iPhone 8 could be the modest promotion by U.S. carriers, Vinh said. "While carriers continue to offer promotions for the new iPhone 8, they have been much more modest compared to the iPhone 7 launch last year," he wrote.

Which probably explains why Economic Daily News reports that Apple is now betting all-in on the iPhone X, cutting supplier orders on the iPhone 8 (and 8 Plus) drastically. [via Google Translate]

But the supply chain has said that "this year is quite rare", the new product has just been mass production for about one to three months, was asked to begin to decline, "is the first time in ten years."

Supply chain sources revealed that iPhone 8, iPhone 8 Plus expectations of 11 - 12 months of shipments of 1 to 1.2 million per month will be substantially reduced, down nearly half of the range, shipment will be only 500-600,000.

So, as we concluded earlier, with Apple bull hopes falling squarely on the shoulders of the iPhone X, a key unknown factor is what the price will be. The much-anticipated iPhone X, a glass and stainless steel device with an edge-to-edge display, will start shipping from Nov. 3 with the 10th-anniversary iPhone priced from $999, Apple"s most expensive mobile till date.

It's Not Just China: No Lines For New iPhone 8 Virtually Anywhere

Earlier we showed that in a striking lack of enthusiasm for Apple"s latest offering, the iPhone 8 which went on sale today, there were just two people in "line" in front of an Apple store in China: less than the security guards at the same location.

Unfortunately for Tim Cook, it appears that it was not just China as the entire world appears to have gotten collective cold feet when it comes to Apple"s newest gizmo,  because while Apple Stores are usually faced with shockingly long lines on the morning of a new iPhone launch, that wasn"t the case today. Anywhere.

As various reports have pointed out, some Apple Stores have very short lines out front for the iPhone 8, if they have anyone at all. According to Reuters, that there were fewer than 30 people at Apple’s Sydney store, which usually has hundreds out front. And it described a “less lively mood in Asia” than for previous launches.

In California, ABC7 reporter Chelsea Edwards posted a photo from outside of an Apple Store with no one in front of it.

Where"s the line? Apple"s #iPhone8 & #iPhone8Plus are being released today...but where are all the @Apple fans? Thoughts? @ABC7 pic.twitter.com/P1UZZlceYh

— Chelsea Edwards (@abc7chelsea) September 22, 2017

Other photos showed short (or no) lines in Brisbane, London, Leicester, and Ottawa

Handful of die hard fans queuing outside Apple’s Regent Street Store, waiting for the #iPhone8 pic.twitter.com/ilADnrtZsH

— Martyn Landi (@MartynLandi) September 22, 2017

Crazy queue for the #iPhone8 & #iPhone8Plus Today ???? pic.twitter.com/qtxRjzfp33

— Safwan Ahmedmia (@SuperSaf) September 22, 2017

$1200 Canadian for iPhone 8. No crowd control required @ctvottawa pic.twitter.com/BOp5nw7qFv

— Graham Richardson (@grahamctv) September 22, 2017

This is the extent of the line up for the new iPhone in Brisbane. Just a dozen deep. Clearly not as much excitement as in previous years. pic.twitter.com/iJGg6S3k3Z

— S Marshall-McCormack (@ShannonMM9) September 21, 2017

According to CBS LA, the Pasadena store was also missing a line of eager fans.

Previous releases of the iPhone attracted hundreds of Apple fans waiting in the early morning hours at several stores across Southern California. The Apple Store has a ticketing system, but that never stopped eager iPhone fans from camping out overnight.

But on Friday morning, all was quiet on Colorado Boulevard, except for employees inside the store handing out tickets.

To be sure, some pockets of enthusiasm remained, such as at Apple’s location at the World Trade Center and on Fifth Avenue in New York which did have a line this morning, and there appeared to be a big turnout in Singapore.

Apple"s #iPhone 8 launches in Singapore, first major product launch in Orchard Road store https://t.co/pJxZkTMerJ pic.twitter.com/0wutgCpBgZ

— The Straits Times (@STcom) September 22, 2017

As we commented earlier, and the Verge adds, there are reasons this launch might not be getting as much turnout. For one, this is the 10th generation of the iPhone, and hype has probably just died down. People are no longer lining up to buy their first or second smartphone, and this year’s model doesn’t have any revolutionary new features that people are willing to wait overnight for.

Furthermore, in November Apple is launching the next "revolutionary" iPhone — the iPhone X — not the iterative update that’s coming out today. It’s the same reason there wasn’t a rush for the iPhone SE, either.

More concerning is that there are signs that the iPhone X is cutting into iPhone 8 online orders, too. Speaking to BuzzFeed News, Angela Ahrendts, Apple’s retail leader, said “it’s kind of our fault” that lines are going away, because Apple gives customers a choice of where to buy their phone, online or in person. That’s been true for years, though. BuzzFeed also says it saw short lines in Toronto, London, and Los Angeles.

While it is too early to conclude if the sudden disappearance of customers is troubling for Apple"s future says, it is hardly the reception Tim Cook - who carefully cultivates the image of pent up demand by parading the lines of people greeting its every product launch - wanted. Still, more important will be what happens outside Apple stores on November 3rd, when the iPhone X comes out, although with concerns mounting about the public"s receptivity to the phone"s face-scanning technology which has already received scathing criticism among even pro-Apple outlets, some investors are unwilling to wait: AAPL stock is down over 1% today and is about to have its worst week since April 2016.