Limited iPhone X supplies dampen competition on Black Friday

iPhone X, 3D sensors
Carriers reined in their promotions during Black Friday partly due to limited supplies of the iPhone X. Image: Apple

Limited supplies of Apple’s iPhone X dampened competition among U.S. carriers over the Black Friday weekend, according to Wave7 Research. And it isn’t at all clear whether operators will become more aggressive as Apple releases more units of its flagship handset in the coming months.

Carriers have reined in their promotions thus far this holiday season as they increasingly focus on maximizing revenues rather than simply grabbing market share. And they aren’t offering huge discounts on Apple’s newest flagship phone, which launched last month and carries a hefty price tag of $1,000 for the basic model.

“Competition is milder this Black Friday, compared to 2016,” Wave7 wrote in a note to subscribers. “The iPhone X is excluded from the lead BOGO offers of AT&T and T-Mobile and Verizon’s lead offers don’t involve iPhones at all. Why discount something when it is in short supply and demand is strong?”

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Despite the lack of promotional activity, though, Apple appears to be enjoying a lucrative holiday season, Wave7 wrote. And much of that is due to its new, high-end phone.

“Based on checks and sources, Apple’s one-two combination of the iPhone 8 as an appetizer and the iPhone X as the main course is working splendidly,” according to the firm. “Sources are pointing to a ‘halo effect’ from the successful iPhone X on other products. Sales are strong.”

Wave7’s report echoes a note issued last week by Cowen Equity Research, which observed promotions for Apple’s newest phones are “more subdued compared to last year.”

The looming question, though, is whether increased supplies of the iPhone X will lead to increased promotional activity, Jennifer Fritzsche of Wells Fargo Securities wrote.

“The key question for us is if the ‘craziness’ begins once the iPhone X is in greater supply,” Fritzsche wrote. “Or, alternatively, does what happened in in Q1 2016 happen once again in Q1 2018… and the upgrade cycle is underwhelming? This is good news/bad news for AT&T and Verizon. Good news in that it may bode well for churn, as iconic devices tend to force a switching decision. But bad news in that equipment revenue may fall short—and therefore, there is an optical hit to revenue.”

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