We have seen several signals that iPhone 11 sales are faring much better than the equivalent iPhone XS and iPhone XR sales period last year. Nikkei Asian Review is also reporting the same, quoting supply chain sources: ‘the autumn is so far much busier than we expected’.
Apple has apparently asked suppliers to increase production of the iPhone 11 by about 10%, which translates to an additional 8 million units.
Nikkei says that the increase in orders is mostly focused on the $699 iPhone 11 and the $999 iPhone 11 Pro, with production for the most expensive iPhone 11 Pro Max SKU revised down slightly.
The iPhone 11 has attracted buyers with an improved wide angle and new ultra-wide lens, upgraded chips and processors, a new back glass design, and a lower price point. Whereas the iPhone XR sold for $749 last year, the iPhone 11 starts at $699.
Due to sales weakness in the holiday quarter of 2018, the effective price of the iPhone XR fell as Apple adjusted prices in certain markets to stimulate sales.
The new $699 base price for the iPhone 11 seems to have hit the sweet spot of strong consumer interest without needing further price action. Of course, demand levels can change wildly as time goes on, so supply chain is still slightly wary of how long the peak production period will last, especially as the US-China trade war fears continue to loom over the smartphone market.
Apple has also incorporated several key software upgrades in its latest iOS 13 software, like a system swipe-to-type keyboard, Dark Mode and more. The big install base of iPhone 6 and iPhone 6 Plus owners may be motivated to upgrade this year, as their phones cannot update to iOS 13.
Apple is also looking to capture more of the market with a new less-expensive iPhone model to be introduced in the first quarter of 2020.