According to analyst Junheng Li with J.L. Warren Capital (via Barron's), Apple (NASDAQ:AAPL) iPhone 6s sales are weaker than many had hoped. The analyst claims that demand for these phones in China is coming in worse than expected.
One major factor that Li claims is leading to weaker-than-hoped iPhone 6s/6s Plus sales in China is the fact that both ZTE and Huawei have already released phones with 3D Touch functionality -- the key selling point of the new phones.
However, I think that this argument makes very little sense. Here's why.
Have Chinese customers actually been able to buy 3D Touch-enabled phones?
Although both ZTE and Huawei have both announced devices with 3D Touch with the Axon Mini and the Mate S, the iPhone 6s and iPhone 6s Plus are arguably the only devices that are actually widely available with this feature.
For example, only one very high-end variant of the Huawei Mate S (the "luxury edition") will include 3D Touch. The device also isn't expected to be available for the public to purchase until sometime in 2016. It's hard to imagine that Chinese customers have all gone out and purchased these phones and are now uninterested in picking up iPhones as a result.
The ZTE Axon Mini was announced back in July, but it's not clear when the phone will actually be available to purchase. I did several Web searches for information about the timing of the availability of the device but found nothing. As with the Mate S, I seriously doubt that ZTE has sold so many of these phones that Chinese customers aren't going to buy the iPhone 6s/6s Plus as a result.
That aside, iPhone 6s/6s Plus are probably doing worse than Apple had hoped
Although I disagree with Li's reasoning for why iPhone 6s/6s Plus sales might be coming in below expectations, I wouldn't be surprised if Apple's iPhone 6s/6s Plus sales are actually coming in lower than both investors and, perhaps, the company itself had hoped.
The potential "tip-off" here is in how Apple handled the disclosure of the sales numbers of iPhone 6s/6s Plus sales over the first three days of availability.
In last year's press release announcing iPhone 6/6 Plus sales over the first three days of availability, CEO Tim Cook had the following to say:
- "Sales for iPhone 6 and iPhone 6 Plus exceeded our launch expectations for the launch weekend and we couldn't be happier."
- "We would like to thank all of our customers for making this our best launch ever, shattering all previous sell-through records by a large margin."
- "While our team managed the manufacturing ramp better than ever before, we could have sold many more iPhones with greater supply and we are working hard to fill orders as quickly as possible."
Note that these quotes make it very clear that demand far exceeded supply, surpassing Apple's own (probably already quite high) expectations.
In contrast, the press-release announcing the iPhone 6s/6s Plus sales had a much more muted tone. Here's what Cook said in the press release:
- "Sales for iPhone 6s and iPhone 6s Plus have been phenomenal, blowing past any previous first weekend sales results in Apple's history."
That's it. "Phenomenal" is a pretty subjective term, and as my fellow Foolish colleague Evan Niu pointed out, this year's numbers included sales to China while last year's didn't, potentially implying that "organic" demand for the 6s/6s Plus was about flat to last year.
It'll be interesting to see how this product cycle plays out for Apple, that's for sure.