Apple's (NASDAQ:AAPL) diehard fans might be eager to buy the iPhone X, but Apple co-founder Steve Wozniak doesn't plan to buy the new device right away. Speaking to CNBC, Wozniak stated that the iPhone X was going to be the first "iPhone I didn't -- on day one -- upgrade to."
Wozniak said that he would "rather wait and watch that one," and that he was happy with his iPhone 8 -- which he felt was "the same as the iPhone 7, which is the same as the iPhone 6." Wozniak also expressed doubts that the polarizing Face ID feature would work as intended.
The Woz has been critical of Apple before
Wozniak left Apple in the early 1980s, and wasn't involved in the company's rebirth under his former partner Steve Jobs in the late 1990s and 2000s. But Wozniak has still closely followed Apple's product launches and hasn't been shy about criticizing its products.
Last year, Wozniak harshly criticized the Apple Watch in a Reddit interview, stating that it took Apple into a "jewelry market" where people "buy a watch between $500 and $1,100 based on how important you think you are as a person." He claimed that wasn't the company "that Apple was originally, or the company that really changed the world a lot." However, Wozniak backtracked earlier this year, declaring on CNBC that he "loves" the Apple Watch because he doesn't "like to be one of those people who pulls phones out of pockets."
Wozniak also dismissed Siri as "poo poo" in a 2012 interview with Times Union, then declared that Amazon's (NASDAQ:AMZN) Alexa -- not Siri -- was the "next big platform for the near future" in a CNBC interview last year. He also previously claimed that Android devices were ahead of iPhones in terms of innovation -- and Apple probably wasn't pleased when he told a Comic Con audience that he was also buying Samsung's (NASDAQOTH:SSNLF) Galaxy S8.
But Wozniak's not alone
Wozniak's comments always get extra attention due to his status as Apple's co-founder, but his opinions still reflect a lot of current attitudes about Apple's products. Apple bulls are attributing soft iPhone 8 sales to pent up demand for the iPhone X -- but there's evidence that suggests that iPhone sales peaked during the 6/6s generation.
This following chart, based on data gathered from Newzoo's analysis of 728 million iPhones currently in use worldwide as of April 2017, reveals that a whopping 54% of iPhone users still use an iPhone 6, 6 Plus, 6s, or 6s Plus.
Apple's past sales data also tells us that iPhone shipments surged 37% to 231.2 million units in 2015, when the iPhone 6s and 6s Plus were launched. Shipments then fell 8% to 211.8 million last year, as demand for the iPhone 7 and 7 Plus failed to match the previous generation. The most common explanations for that softness were the iPhone 7's lack of a headphone jack and the absence of meaningful form factor or hardware improvements from the 6s.
Simply put, many iPhone owners simply felt that they had "good enough" devices that didn't merit annual upgrades -- the same dilemma that throttled iPad sales for years before the business finally returned to growth earlier this year on sales of cheaper iPads.
Moreover, the iPhone X's lack of a headphone jack and the complete replacement of Touch ID with Face ID have been polarizing moves that might convince some users to stick with their aging 6s devices. Meanwhile, ongoing production issues indicate that many early adopters probably won't even get an iPhone X when it launches in early November.
But most analysts aren't worried
It's easy to see why the bears believe that Apple's iPhone sales, which generated 55% of its revenues last quarter, could peak with the iPhone X. However, Apple's recent comment that iPhone X pre-orders were "off the charts," coupled with the fact that pre-orders are now being scalped online, indicate that the bulls could be right about the pent-up demand for the iPhone X.
Apple doesn't disclose its pre-order figures, but GBH Insights analyst Daniel Ives predicts that pre-orders have likely hit 50 million, which would make the first stage of the launch a "stellar success." KGI analyst Ming-Chi Kuo also sees pre-orders hitting 50 million, although he warns of supply constraints continuing through next spring. As a result, most analysts and research firms see Apple's iPhone sales rising somewhere between 9%-23% in 2018 -- which would alleviate fears of peaking iPhone sales.
The bottom line
Wozniak makes some good points about the iPhone X as a tech device. But he, like many tech-savvy pundits, ignores the fact that the iPhone has become more of a luxury consumer product -- like a high-end handbag -- than a computing device. It's that distinction, and the scarcity of the device now, that could lift iPhone shipments to new highs this year.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.