A note from Morgan Stanley analyst Katy Huberty predicts that the high price of the iPhone X along with a “supercycle” of upgrades could lead to shoppers spending the majority of their money in an Apple Store.
This will negatively affect other retailers who sell clothes, jewellery etc. Huberty expects that iPhone X sales will absorb $30 billion in discretionary spending that will impact other retailers.
“Apparel is a wallet share donor to other categories, with cell phones/technology and services being two of them,” according to a Morgan Stanley note to clients. “We see this upgrade supercycle coupled with the very high $999 iPhone X average selling price as a significant headwind to Specialty Retailers and Department stores in the fourth quarter.”
Most consumers will curtail their spending in other categories after getting the $999 iPhone X by thinking that they just got an expensive phone and don’t need “another pair of jeans.”
As for the reason behind the iPhone X “supercycle,” Huberty believes it will be due to the new form factor, improved battery life, and AR features of the device. The new design is also a major attraction for many consumers especially since Apple has largely followed the same design language since the unveiling of the iPhone 6 in 2014.
Worse, due to the limited supply of iPhone X, Huberty says that demand for the device will remain high even after the holiday season which will thereby continue to affect other retailers negatively.n
Do you plan to spend the majority of your shopping money on the iPhone X this year?
[Via Business Insider]Like this post? Share it!