9 Things We Learned From The US iPhone XS and XS Max Day 1 Launch

At 8:00am Apple and carrier stores country wide opened their doors to welcome customers to the new iPhone XS and XS Max launch, as well the new Apple Watch Series 4. Here is what we learned about the first hours of sales:

  1. The time for huge lines and new launch excitement has passed. People are still coming in to be the first to get a new device, but it is much tamer than in the years past. Only a small amount of Apple enthusiasts still enjoy camping overnight in front of metro Apple stores instead of pre-ordering online. With the ease of online sales, lines are no longer the best gauge of sale success.
  2. The iPhone XS Max won out the initial device sales drive 2-to-1. This is due to many customers upgrading their phone under Apples iPhone Upgrade Program. These customers mostly own the iPhone X and just wanted to get the newest and best device.
  3. Carrier stores were open but saw smaller customer demand. This is likely because most customers who wanted to upgrade were on the iPhone Upgrade Program and had to go to an Apple store instead of their carrier. While carriers are offering good promotions, many customers are also not currently eligible for upgrades yet. Aside from this, customers also won’t wait in line at 8:00 am to get the new upgrade. Sales in this channel will happen more gradually when subscribers have time or are conveniently in an area of their carrier store.
  4. Dealer store checks in southern California and the east coast showed limited or zero supply within dealer channels on launch morning. The week prior, these stores had expected to have devices. This leads us to believe that pre-orders in non-dealer stores were healthy and that many dealers did not get launch-day devices.
  5. Pre-orders within carrier COR (corporate owned retail) stores saw significantly more interest for the XS Max than the XS.
  6. Non-upgrade program customers were switching from older devices (iPhone 6s, 7, 7 Plus). These customers were mainly going for the cheaper and smaller form factor iPhone XS, as it fit more with what they previously were using and were waiting for this upgrade.
  7. 256 GB is the sweet spot for most customers. It provides the best in terms of memory need and price for customers. The 512GB price point was often deemed excessive and too expensive. Stores only had a very limited number of 512GB devices in stock. Many buyers commented that a 128GB may have been a significant volume winner, but early purchases were inclined to go with 256GB over 64GB by a wide margin.
  8. Almost half of all customers in line were getting the Apple Watch Series 4. There was a lot of excitement around the new Apple Watch, a surprising trend which is likely fueled by the new features that the watch offers.  Apple store checks saw rampant Apple Watch interest while carrier channels were much slower.
  9. National retailers did not see pent up demand. BestBuy and Target did not open early like Apple stores and carrier channels. However, store checks did point to Apple launches as being a positive as it draws traffic and accessory sales.

Overall, the first day showed us the power of Apple’s iPhone Upgrade Program driving initial sales over carrier specific deals. Carrier channel offers for switchers were more rational than in past years and there were zero free upgrade programs offered this launch, which will keep opening weekend volumes in check. Many customers will go for the 256GB version, especially if they are upgrading under the Apple program. Carrier sales will most likely pick up over the next few weeks. The Apple Watch Series 4 had a strong launch and shows demand for the new health-oriented features like the ECG.