There was a lot of hype leading up to this past weekend's debut of Apple's (NASDAQ:AAPL) shiny new smartphone, but reality has been somewhat of a buzzkill. Apple Store locations across the country may have been busier than usual on Friday morning, but it just didn't seem like the feeding frenzy that accompanies the tech giant's product launches in past years.
Apple was quick to put out a press release featuring smiling customers with their new iPhone 8 and iPhone 8 Plus devices at its stores worldwide, but seemingly missing from the experience were the crowds camping out overnight on Thursday and the huge lines of people willing to wait hours to grab an iPhone before supplies run out.
Phoning it in
You didn't have to be at an Apple Store on Friday to see that this update cycle lacks the punch of previous rollouts. You could pull up a stock chart. Apple stock has fallen in all but two of the nine days since the iPhone media event was held two weeks ago. The stock opened below $150 this morning, the first time we've seen the shares at these levels in eight weeks.
Another easy demand check is Apple's website, where iPhone orders across all of the major carriers showing Monday morning orders shipping out in one to three days. You would have had to wait as long as several weeks in previous cycles if you had procrastinated to the point of waiting until after a new iPhone model's debut weekend to place your order.
There was also no Apple press release gushing about record sales metrics the way we saw in the past. To be fair, Apple did stop the practice last year, arguing that it was no longer representative of demand since the devices typically sold out. However, that doesn't seem to be the case this year. Apple CEO Tim Cook was on CNBC on Friday, pointing out that some stores did sell out of their launch inventory, but the iPhone 8 and iPhone 8 Plus are readily available just about anywhere now.
I was in New York City on Friday, and while I was not near the flagship Fifth Avenue store, I did notice that the wireless carrier outlets that opened early in anticipation of pushing new iPhones seemed surprisingly light on traffic. I then found myself at the Apple World Trade Center store shortly before 11a.m., and while it was busy like the rest of the high-traffic shopping center, there were no long lines of guests waiting to buy Apple's new hardware that would be snaking around outside of the store.
You don't need to be a rocket scientist or a Genius Bar tender to know that the iPhone 8 demand is light because the game-changing iPhone X hits the market in less than six weeks. However, with rumblings of supply constraints ahead of the launch of Apple's priciest iPhone, one may start to wonder if the likely weakness in Apple's fiscal fourth quarter that ends this week will carry over into the fiscal first quarter of 2018. Apple will be going from a demand problem with the iPhone 8 to a supply problem with the iPhone X, and the end result in both cases is that financial results suffer.