Fretting over iPhone X sales data is a fool's errand, analyst Ming-Chi Kuo believes, as he told investors on Monday that the premium-priced handset is a key strategic move for the company, positioning it far ahead of competitors for years to come.
Kuo, of KGI Securities, said the iPhone X has been a "strategic success" for Apple, cementing long-term competitive advantages for the company with Face ID and the TrueDepth cameras. His take was issued in a note to investors on Monday, a copy of which was obtained by AppleInsider.
In his view, the 3D sensing capabilities in the iPhone X will pave the way for more advanced augmented reality and artificial intelligence applications. These could be simple and fun enhancements like further improvements to Animoji, or more advanced capabilities such as superior understanding of user behavior.
Kuo believes copycats will be in full effect in 2018, scrambling to put their own Face ID competitors into smartphones. But Apple's technical advantages have it up to two years ahead of the competition currently, in his view.
"We believe the iPhone X has established a long-term edge for Apple," he said.
The $999-and-up pricing of the iPhone X has also changed the mindset on what smartphones should cost, giving Apple more flexibility to expand its lineup and introduce premium features in the years to come.
To maintain that pricing psychology, Kuo believes that the 2017 iPhone X will be discontinued later this year — a prediction he reiterated from a separate note issued last week. Rather than keeping the model around and dropping the price, he believes Apple will introduce new models at the current prices, leaving the legacy iPhone X behind in its sales lineup.
In his view, the iPhone X will prove to be a long-term success for Apple, as future handsets will benefit from the path it has trailblazed. He expects that new handsets in the second half of 2018 will make up for any perceived sales "shortfalls" with the current lineup.
Later this year, Apple is expected to expand the iPhone X lineup with a so-called "iPhone X Plus," boasting the size of a larger Plus-sized iPhone model with an edge-to-edge OLED screen.
It's also expected that a new 6.1-inch LCD model with Face ID and lacking a home button, but without an edge-to-edge OLED display, will also become a part of the iPhone lineup.
Prior to that, Apple is also rumored to ship a budget-priced second-generation iPhone SE that will serve as the new entry-level model. Unlike the iPhone X or new handsets expected in late 2018, it is not anticipated to have advanced technology, and will instead focus on selling the iPhone experience to price-conscious consumers.