The iPhone 8 and iPhone 8 Plus go on sale today, 10 days after being unveiled alongside the new flagship iPhone X.
Unlike years past, the question of the season is not if consumers will purchase the new phone, but rather which one. The step-up X won’t be in stores until Nov. 3, and iPhone 8 presales were lower than those of the 7 and 6s models.
Apple will offer eight iPhone models for the holiday selling season: iPhone SE, 6s and 6s Plus, 7 and 7 Plus, 8 and 8 Plus, and the X. Wall Street’s UBS commented on the multiple SKUs, calling them “a bit confusing.”
“The company appears to be more sophisticated in its market segmentation,” it said. “iPhone X at $999/$1,149 and a $50 bump up in iPhone 8 suggest Apple believes it can value price at the high end. The iPhone line has quite a few SKUs now, a bit confusing but covering price points down to the lowered SE at $350 and providing a 4.7-inch screen in the $400 to $500 range.”
See also: 10 Accessories For The New iPhones
Eddie Hold, president of NPD Connected Intelligence, said approximately 20 percent of the U.S. population plans to purchase a new iPhone, roughly half of the company’s iPhone customer base and about standard for the circumstances.
However, Hold noted, “The Apple intender base is fairly evenly split between which device they plan to purchase, with the X and the 8 commanding equal interest at 25 percent of those planning to purchase a device, and the iPhone 7 showing slightly more interest at 29 percent.”
“Older models are also showing significant interest,” Hold said, “with pre-7 models commanding 21 percent of the population’s intent. Over half of those intending to buy an iPhone fairly soon are looking at older models, rather than the newly announced devices.”
Despite being the most expensive iPhones Apple has ever introduced — the iPhone 8 starts at $699 and the iPhone X $999 — analysts believe consumers will ultimately overcome the initial sticker shock. Hold said carriers have a real opportunity by breaking down the price into more palatable monthly payments, while BMO Capital Markets, the analyst subsidiary of the Canadian Bank of Montreal, said the large number of used iPhone indicates a consumer base motivated to upgrade regardless of price.
BMO sees “a very strong setup into the quarter, with nearly one-third of the new iPhone installed base being two years or older. Combined with a total installed base of 745 million, including 261 million used iPhones, we believe plenty of consumers will be motivated to upgrade to the new models, even with the higher pricing.”