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Abu Dhabi, UAEFriday 14 December 2018

Apple says iPhone X pre-orders are 'off the charts'

Consumers can now pre-order the flagship smartphone

The hotly awaited iPhone X is now available to pre-order. AP Photo/Marcio Jose Sanchez
The hotly awaited iPhone X is now available to pre-order. AP Photo/Marcio Jose Sanchez

Apple Inc quashed concerns of muted demand for its iPhone X on Friday, saying pre-orders for the 10th anniversary phone were “off the charts”.

The company’s shares, which have fallen steadily since it announced in early September it would launch two iPhones within two months, rose nearly 3 percent in response.

Pre-orders for the much-anticipated 10th anniversary phone started from 12.01 am PT (11 am UAE time) on Friday.

“We can see from the initial response, customer demand is off the charts,” an Apple spokeswoman told Reuters.

“We’re working hard to get this revolutionary new product into the hands of every customer who wants one, as quickly as possible.”

At $999 (Dh3,669), the flagship smartphone is not cheap, but it comes with a 5.8-inch all-screen super retina HD display, all-glass and stainless-steel design, TrueDepth camera that enables Face ID, portrait mode selfies, and Animoji. It also has dual 12MP cameras with portrait mode and portrait lighting, and wireless charging.

For customers in the UAE, there are various pre-order options available.

The Etisalat website tells its customers to order their new iPhone X online or through any of the Etisalat stores, and get it delivered free of charge.

“Due to high demand, the new orders’ expected delivery will be within 3 working days starting from November 11, 2017,” the website says.

Etisalat offers various smartpay offers, starting from just Dh185 per month for customers opting for a 24 month contract with the iPhoneX 64GB.

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The du website, meanwhile, offers the new iPhone at Dh0 upfront on some of their postpaid plans. However, the website says both the space grey and silver devices are currently out of stock.

“Stocks are updated daily. Please check again later,” the website says.

Apple’s website showed delivery times pushed out to five to six weeks for the phone, compared to an initial plan of November 3.

Pre-ordering is a smart tactical move for Apple because it helps lock people in - even though the company doesn’t collect payment until the phone actually ships.

Under retail chief Angela Ahrendts, Apple has made it much easier to secure iPhones well in advance. That’s led to shorter lines of expectant fans waiting outside stores on release days.

So even though analysts widely expect iPhone X supplies to be limited early on, the device will still be available in 55 countries and territories.

Earlier this week, Apple said that walk-in buyers should “arrive early.”

Thanks to manufacturing challenges, shortages of the 10th anniversary phone are widely expected in the coming weeks.

“Any time you can get people to pre-commit to a product that’s not available, it’s good news,” said Julie Ask, a Forrester Research analyst. “It gives you a lot of visibility, it’s less expensive than selling it to people in stores, it’s easier to tell people when it’s going to arrive.”

As more people pre-order, delivery times will likely lengthen as Apple’s initial supply of iPhone X models is eaten up.

The risk of losing customers to Android handset maker Samsung Electronics Co. due to delivery delays is small, since the South Korean company’s flagship phone has been available since April, according to Shannon Cross, an analyst at Cross Research who recommends buying Apple shares. Customers are more likely to buy Apple’s lower-specification iPhone 8 if they’re impatient, she said.

“If you can’t get one, I don’t think you’re going to jump over to Samsung,” Cross said. “And clearly the more that you can lock in pre-orders, you can lock in customers.”

The iPhone X may bring customers into Apple stores who instead opt for a cheaper model, according to Madhavan Ramanujam, a consultant at Simon-Kucher & Partners. “The average customer may not buy the iPhone X,” he said. “For those who won’t, the iPhone 8 is out there and is $300 cheaper.”

Apple will report earnings November 2, when it will also give guidance for the holiday quarter. Analysts expect revenue in those three months of $86 billion, up almost 10 percent from the same period a year earlier, indicating they don’t anticipate supply issues to burden sales.

The pre-order system, combined with the iPhone Upgrade Program where consumers pay a monthly fee to trade in for a new handset each year, lets Apple manage its supply chain more effectively, according to Crawford Del Prete, chief research officer of IDC. Apple can match supply to demand more effectively, he added.

While the supply chain struggles may cause shortages early on, Apple’s stock is trading near records on optimism about the iPhone X’s longer-term prospects, Del Prete said.

“Are they a problem if you take the six-quarter view? I don’t think so,” Del Prete said. “This ecosystem is so powerful."