Vertical Divider

iPhone XR Finally Released & Expected to Outsell OLED Versions
October 22, 2018

​Demand for the iPhone XRis forecast to be higher than demand for the iPhone 8last year, noted analyst Ming-Chi Kuoreiterated in a note to investors. Kuo predicts better than expected replacement demand for iPhone XR along with improved supply starting in October, leading him to revise his predicted shipment estimates. Apple is now expected to ship 36 to 38 million iPhone XR units in the fourth quarter of 2018, up 10 percent from an original estimate of 33 to 35 million units. Kuo is expecting the iPhone XR to outsell the iPhone 8 because of its larger display, longer battery life, dual-SIM support, and new form factor design. With the revised XR shipment expectations, Kuo believes Apple will ship a total of 75 to 80 million-iPhone units during Q418, which is 10m higher than the prediction of Hyundai Securities, which we published last week.  iPhone XR shipments are also expected to be up in the first quarter of 2019, a historically slow quarter for Apple. Quarter over quarter decline is expected to be at 25 to 30 percent instead of 45 to 50 percent for iPhone 8.Kuo said, “We expect XR shipments to beat low seasonality in 1Q19. 

We forecast that XR shipments in 1Q19 will decline 25-30% sequentially to 27-30mn units, and we attribute the lower XR shipment sequential decline, compared with general consumer electronics and smartphones' 30-40% sequential  decline, to better replacement demand and production delay. Also, XR's shipment sequential decline in 1Q19 will be better than the iPhone 8 series' 45-50% in 1Q18.” Total iPhone shipments in the first quarter of 2019 are expected to grow by 10 percent year-over-year to 55 to 60 million units thanks to the strength of the iPhone XR. Shipment allocations of XS, XR, and legacy models will be at 35 percent, 50 percent, and 15 percent respectively.  Apple's iPhone XR will be available for pre-order at 12:01 a.m. Pacific Time on Friday, October 19, with an official launch to follow on Friday, October 26. Apple's colorful new iPhone will be priced starting at $749 for the entry-level model.Apple is expected to continue using OLED displays for the 2019 devices, and while some rumors suggest Apple may go with an all-OLED lineup, doing away with the LCD displays of the iPhone XR, other rumors believe Apple will stick with LCDs because of the high price of OLED displays.  All 2019 iPhones are likely to adopt upgraded A13 chips from TSMC, Apple's chip supplier. Chip upgrades typically bring improved performance and efficiency, and the A13 will be no different.Ming-Chi Kuobelieves the company will continue to offer three iPhones in 2019 with the same general lineup seen in 2018.  In a note to investors about Apple supplier Luxshare's predicted market share released this morning, Kuo included a chart that suggests Apple will continue to offer 5.8 and 6.5-inch OLED iPhones in 2019, along with one 6.1-inch LCD model. 
 
Table 1: iPhone Releases by Year

Source: Ming-Chi Kuo

​That's the same lineup used this year, which consists of the 5.8 and 6.5-inch OLED iPhone XSand XS Max and the 6.1-inchiPhone XR.  Rumors about the 2019 iPhones have been circulating for a few months now, but this is the first time that we've heard specific details on the number of devices we can expect to see in 2019 and their screen sizes.  Given that 2018 is sort of an "S" upgrade year with no major changes to the iPhone X design introduced in 2017, there was a possibility that Apple could condense its iPhone lineup or introduce new screen sizes, but it looks like we may be sticking with the current lineup for at least another year. A contrary release schedule was published by IHS, which predicted that Apple would continue the iPhone XR in 2019, but in 2020, would convert to a product line that is all OLEDs, including a foldable device. 
 
Figure 1: IHS’s iPhone Roadmap

Source: IHS Markit
​
Other 2019 iPhone rumors have suggested the upcoming iPhones will adopt faster, more efficient A13 chips from TSMC, triple lens rear camera systems, revamped front-facing TrueDepth camera systems, and perhaps support for the Apple Pencil.