Increase in iPhone X inventory could pave the way for post-holiday T-Mobile promotions: Wells Fargo

Apple, iPhone X, facial recognition, security, Juniper market research
Inventories of Apple's iPhone X are finally increasing. Image: Apple

The U.S. wireless market has been unusually calm this holiday season as carriers have focused on maximizing profits rather than growing their market share. But increasing inventories of Apple’s iPhone X could pave the way for aggressive promotions from T-Mobile early next year, according to Wells Fargo Securities.

A lack of compelling iPhone promotions has highlighted a placid competitive market as the fourth quarter comes to an end, as Wave7 Research noted last week.

“Some investors worried that with the T-Mobile/Sprint deal off, competition would return to the intense levels seen in 2016. This has not materialized, with no service pricing cuts, no crazy iPhone offers, and the end of Verizon’s $650 ETF (early termination fee) buyout,” Wave7 wrote in a note to subscribers. “AT&T does have a multi-OEM BOGO that includes iPhones, but T-Mobile has no iPhone offers at all and Sprint has weakened its iPhone offer. Verizon’s offer is modest, as it requires trade-in of a valuable phone to get a $300 credit.”

Verizon is hoping to shake things up with Friday’s launch of a buy-one, get-one-free campaign for an iPhone 8 or 8+ or a Samsung Galaxy S8 or S8+. Like other recent promotions, though, Verizon’s offer doesn’t apply to the iPhone X, which has been in limited supply due to component problems.

Supplies of Apple’s high-end smartphone are growing, though, Jennifer Fritzsche of Wells Fargo observed in a research note sent to investors over the weekend. And that could lead to more aggressive promotions after the holidays—particularly from T-Mobile, which often seeks to take advantage of opportunities during the first quarter as other carriers rein in their promotional efforts.

“Checks still show a fairly rational competitive pricing environment—even with better supply from the iPhone X,” Fritzsche wrote. “This last part is key as we were worried that once greater supplies of the device was seen—then the craziness would begin…. The key question is will this last in Q1 when the iPhone X supply continues to improve. Something to watch for sure (especially knowing our little magenta friends tend to get more aggressive in Q1 if history is any guide!).”