Apple's iPhone X went on sale Friday, as the company scrambles to meet demand for a marquee device that sports a lush screen, facial-recognition skills and a $1,000 price tag.
The new Apple iPhone X sits on display as consumers line up to buy the phone at the new Apple Michigan Avenue store along the Chicago River Friday, Nov. 3, 2017, in Chicago. (AP Photo/Charles Rex Arbogast)
In this Tuesday, Sept. 12, 2017, photo, the new iPhone X is displayed in the showroom after the new product announcement in Cupertino, Calif. The iPhone X's lush screen, facial-recognition skills and $1,000 price tag are breaking new ground in Apple's marquee product line. (AP Photo/Marcio Jose Sanchez)
Most analysts have predicted Apple won't be able to catch up with demand until early next year.
But the company is optimistic. "As we approach the holiday season, we expect it to be our biggest quarter ever," CEO Tim Cook told Wall Street analysts Thursday. He added that the company is increasing its iPhone X production capacity every week.
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Apple's iPhone X went on sale Friday, as the company scrambles to meet demand for a marquee device that sports a lush screen, facial-recognition skills and a $1,000 price tag.
In this Tuesday, Sept. 12, 2017, photo, the new iPhone X is displayed in the showroom after the new product announcement in Cupertino, Calif. The iPhone X's lush screen, facial-recognition skills and $1,000 price tag are breaking new ground in Apple's marquee product line. (AP Photo/Marcio Jose Sanchez)
Most analysts have predicted Apple won't be able to catch up with demand until early next year. But the company is optimistic. "As we approach the holiday season, we expect it to be our biggest quarter ever," CEO Tim Cook told Wall Street analysts Thursday. He added that the company is increasing its iPhone X production capacity every week.
Apple is now giving delivery times of three to four weeks, down from five to six weeks, for those ordering online. Lines formed outside stores in New York, Chicago, Hong Kong, Milan, Italy, and Dubai, United Arab Emirates, among others, as customers came to pick up orders or to grab one of the limited numbers available for same-day sales Friday.
Customers line up to buy the new iPhone X as they reserved online earlier at an Apple Store in Hong Kong, Friday, Nov. 3, 2017. (AP Photo/Kin Cheung)
Shares rose 2.8 percent to $172.89 in midday trading Friday.
Apple had said Thursday that iPhone sales rose 3 percent, to 46.7 million, in the July-September quarter, a period that saw the iPhone 8 and 8 Plus come out in the final weeks. Sales could have been higher if many customers hadn't been waiting for the iPhone X.
As with recent quarters, one of the main sources of Apple's growth is coming from its services, which are anchored by an app store that feeds the iPhone and other devices.
Revenue in that division surged 34 percent to $8.5 billion during the July-September period. All told, Apple earned $10.7 billion on revenue of $52.6 billion, compared with a $9 billion profit on revenue of $46.9 billion a year earlier.
"The Super Bowl for Apple is the iPhone X," GBH analyst Daniel Ives said. "That is the potential game changer."
Even with the iPhone X's delayed release, Apple is still struggling to catch up.
The first customers in line are greeted by Apple employees as they enter the Apple Store on New York's Fifth Avenue, to get their iPhone X, Friday, Nov. 3, 2017. (AP Photo/Richard Drew)
"What Apple needs to do is manage consumer expectations so they don't get frustrated having to wait for so long for a new phone," Ives said.
Forrester's Julie Ask said would-be buyers aren't likely to switch to Android just because they can't get an iPhone X right away. At most, Ask said, it will delay when Apple gets revenue.
Consumers line up to buy the Apple iPhone X at the new Apple Michigan Avenue store along the Chicago River Friday, Nov. 3, 2017, in Chicago. (AP Photo/Charles Rex Arbogast)
Apple is now giving delivery times of three to four weeks, down from five to six weeks, for those ordering online. Lines formed outside stores in New York, Chicago, Hong Kong, Milan, Italy, and Dubai, United Arab Emirates, among others, as customers came to pick up orders or to grab one of the limited numbers available for same-day sales Friday.
Consumers line up to buy the Apple iPhone X at the new Apple Michigan Avenue store along the Chicago River Friday, Nov. 3, 2017, in Chicago. (AP Photo/Charles Rex Arbogast)
Customers line up to buy the new iPhone X as they reserved online earlier at an Apple Store in Hong Kong, Friday, Nov. 3, 2017. (AP Photo/Kin Cheung)
Shares rose 2.8 percent to $172.89 in midday trading Friday.
Chase Thilleman receives a high five from an Apple employee as he is first in line to buy the Apple iPhone X at the new Apple Michigan Avenue store along the Chicago River Friday, Nov. 3, 2017, in Chicago. (AP Photo/Charles Rex Arbogast)
Apple had said Thursday that iPhone sales rose 3 percent, to 46.7 million, in the July-September quarter, a period that saw the iPhone 8 and 8 Plus come out in the final weeks. Sales could have been higher if many customers hadn't been waiting for the iPhone X.
Freddy Drzewiecki, from Buffalo, N.Y., configures his new iPhone X at the new Apple Michigan Avenue store along the Chicago River Friday, Nov. 3, 2017, in Chicago. (AP Photo/Charles Rex Arbogast)
As with recent quarters, one of the main sources of Apple's growth is coming from its services, which are anchored by an app store that feeds the iPhone and other devices.
Jiahao Luo, left, and Jiahao Wang, from China, configure one of the four new Apple iPhone X's they purchased at the new Apple Michigan Avenue store along the Chicago River Friday, Nov. 3, 2017, in Chicago. (AP Photo/Charles Rex Arbogast)
Revenue in that division surged 34 percent to $8.5 billion during the July-September period. All told, Apple earned $10.7 billion on revenue of $52.6 billion, compared with a $9 billion profit on revenue of $46.9 billion a year earlier.
Nonetheless, the just-ended quarter largely became an afterthought once Apple decided to release the iPhone X six weeks after the iPhone 8.
A customer hands over cash as she pays for an iPhone X at the Apple Store on New York's Fifth Avenue, Friday, Nov. 3, 2017. (AP Photo/Richard Drew)
"The Super Bowl for Apple is the iPhone X," GBH analyst Daniel Ives said. "That is the potential game changer."
But it also brings a potential stumbling block. While conspiracy theorists might suspect that Apple is artificially reducing supply to generate buzz, analysts say the real reason is that Apple's suppliers so far haven't been able to manufacture the iPhone X quickly enough.
Making the iPhone X is proving to be a challenge because it boasts a color-popping OLED screen, which isn't as readily available as standard LCD displays in other iPhone models. The new iPhone also requires more sophisticated components to power the facial-recognition technology for unlocking the device.
A customer counts out cash for the purchase of two iPhone X's at the Apple Store on New York's Fifth Avenue, Friday, Nov. 3, 2017. (AP Photo/Richard Drew)
Even with the iPhone X's delayed release, Apple is still struggling to catch up.
Apple is counting on the iPhone X to drive even higher-than-usual sales during the first nine months of next year — a scenario that might not play out if production problems persist and impatient consumers turn instead to phones from Google or Samsung.
Customers are greeted by Apple employees as they enter the Apple Store on New York's Fifth Avenue, to get their iPhone X, Friday, Nov. 3, 2017. (AP Photo/Richard Drew)
The first customers in line are greeted by Apple employees as they enter the Apple Store on New York's Fifth Avenue, to get their iPhone X, Friday, Nov. 3, 2017. (AP Photo/Richard Drew)
"What Apple needs to do is manage consumer expectations so they don't get frustrated having to wait for so long for a new phone," Ives said.
Analysts believe Apple can pull off the juggling act.
Customers line up to buy the new iPhone X, after they reserved it online, at an Apple Store in Milan, Italy, Friday, Nov. 3 2017. (Matteo Bazzi/ANSA via AP)
Forrester's Julie Ask said would-be buyers aren't likely to switch to Android just because they can't get an iPhone X right away. At most, Ask said, it will delay when Apple gets revenue.
In this Tuesday, Sept. 12, 2017, photo, the new iPhone X is displayed in the showroom after the new product announcement in Cupertino, Calif. The iPhone X's lush screen, facial-recognition skills and $1,000 price tag are breaking new ground in Apple's marquee product line. (AP Photo/Marcio Jose Sanchez)
They are expecting the company to sell 242 million iPhones in the fiscal year ending in September 2018 — the most in the product's history. The previous record was set in 2015 when Apple shipped 231 million iPhones, thanks to larger models introduced just before the fiscal year began. By comparison, Apple shipped nearly 217 million iPhones in its just-completed fiscal 2017.
If Apple falters, investors are likely to dump its stock after driving the shares up by 45 percent this year on the expectation that the iPhone X will be the company's biggest hit yet.
