Five Observations from Last Week’s iPhone 12 Launch

Apple officially began selling its newest iPhone 12 and iPhone 12 Pro last week. The iPhone 12 mini and iPhone 12 Pro Max hit the stores November 13. Long gone are the days of people waiting overnight to be the first in line to get their hands on the newest iPhone. Instead, Apple has opted to operate on an appointment-only basis due to the pandemic. Last year, Apple had the same system but on a partial basis. This year’s launch is unlike any other, with Apple betting big on its entry into the 5G market with the iPhone 12 line-up. Here are our top five observations from last week’s US launch:

  • The iPhone 12 Pro is a big favorite at the Apple Store: Our initial estimate for the launch day is that the iPhone 12 Pro is outselling the iPhone 12 four-to-one. This isn’t unusual for the first few days of an iPhone launch. The higher-end iPhones tend to sell more as the early adopters and Apple iPhone Upgrade Program subscribers skew towards higher-end models.
  • More upgrades from 2-year or older devices: While it is still early, more iPhone 12 and iPhone 12 Pro purchasers are upgrading from a device that is two or more generations older, such as the iPhone X series or the iPhone 8 series. The 5G upgrade becomes an enticing proposition for these consumers to have a device that is “future proof” for several years. In addition, while the iPhone Upgrade Program is still a big driver for initial iPhone launch sales, it seems to be less popular this year. A reason for this could be that people are still waiting for the iPhone 12 Pro Max and delaying their upgrade for a few weeks.
  • Carriers are seeing more interest for the iPhone 12 and switcher deals: Carriers tend to have a more limited selection of iPhones on the launch day. Apple likes to tightly control inventory during the launch week to steer consumers to its stores. Carrier store inventory checks in six US cities showed limited availability of iPhone 12 Pro devices. The iPhone 12 was in stock at more locations. Most carriers are quoting availability of the iPhone 12 Pro until mid to end of November. Consumers looking to upgrade did not have as many choices in carrier stores, but many still opted for the iPhone 12. Due to the great switcher offers currently available, we are also seeing more switchers at carrier stores.
    • AT&T switchers and upgraders can get a new iPhone 12 free with an eligible trade-in device.
    • Verizon is offering up to $800 for switchers via a $550 trade-in offer and $250 e-gift card with select unlimited plans.
    • T-Mobile switchers can get up to $850 for trade-ins of select iPhone 11 and XS series models.
T-Mobile Store iPhone 12 Promotions
A T-Mobile store sports an iPhone 12 promotional sign (right) at its launch.
  • The (limited) Apple Store traffic still outshines that of carrier stores and retailers: Some carrier stores did not open early for this Apple launch, but this was geographically dependent. East coast and west coast checks showed AT&T stores opened at 8 am while T-Mobile and Verizon kept their regular hours. Cities such as Denver and Boise, and west coast cities saw more carrier stores opening early at 8 am. Retailers like Best Buy kept their regular hours. Xfinity Mobile stores also had normal business hours. When consumers opted to go in-person, many chose to go to the Apple Store over their own carrier stores.
Apple Store iPhone 12 Crowds
Customers picking up their new iPhone and iPad devices at an Apple Store.
  • Online ordering with home delivery is up: We have previously reported how online sales have gone up to over 33% of total sales during the pandemic. While we are not seeing such a high increase in online sales anymore, it has certainly shifted more people towards ordering online and getting devices shipped to their homes. This hurts accessory sales and also prevents carrier representatives from suggesting other add-ons which lower ARPU. Online sales will also likely increase the need for care calls. Apple is also experimenting with Express Stores around the US and internationally to allow for faster, almost contactless pick-up of merchandise ahead of the holiday sales period.