Everyone has been less bullish or skeptical if Apple this time will witness a "Super Cycle" for demand of its new iPhone X, 8 series portfolio like it enjoyed with the iPhone 6/6Plus series three years ago (see here and here). Part of this has been Apple's plateaued performance outside its core dominant markets USA and Japan and steady decline in the world's largest smartphone market and Apple's second largest market China (see here). Apple's iPhone was no longer the best-selling phone in China for the first time ever in 2017 (see here).

The indicators are mixed, as Apple did have a terrific holiday season quarter (see here) but the demand for its flagship iPhone X seems to be tapering off with the supply chain order cuts and outlook for near- to mid-term. The iPhone X has been really well received in its home market with demand at an all time high (see here), though Chinese consumers haven't warmed up yet to the iPhone X. Maybe, it is a function of higher price for the new models plus undifferentiated features than the rival Android camp or marketing efforts for X, which still has been ramping up pre-Chinese New Year season. In our initial survey at the iPhone X launch, asking Chinese consumers on their purchase intention towards iPhone X (see here), we understood that purchase intention is fairly high among iPhone users but very low among Android users. However, in markets outside China, Apple should do fairly well to maintain its share and some markets exceeded its share such as USA, Japan and parts of Europe.

The volume super-cycle looks to be difficult this year through iPhone X or 8 series, but what we could witness here is Apple entering into "Revenue Super-Cycle" for iPhones. Already at the end of Q4 2017, Apple generated massive revenues, commanding significantly higher Average Selling Price (ASP) for its new iPhones and registering record smartphone hardware revenue share across regions.

• Apple now controls almost 50% or half of the global smartphone revenues competing in a market with more than 500 regularly active brands.
• The gap between Apple vs Samsung and others is getting wider like it has been in for profits (see here) earlier before the Chinese vendor ramped up with scale
• Apple also now controls almost 76% or three-fourths of the smartphone revenues in North America market and almost 57% in Europe with more than two-thirds in many Western European individual markets

• The major reason has been, consumers willingness to pay higher and higher price for the iPhones every year as most of them see smartphones as the crux for their digital lives
• Secondly, Apple's brand, user-experience and design stickiness still remains the key motivators for consumers and preferably for 700 million strong global iPhone users to upgrade and willingly open up their wallets to Apple incrementally paying higher ASP every year if not that much from Android switchers
• Further, Apple's clever anchor pricing strategy for higher memory capacity SKUs (e.g. 256GB versions) choice of OLED display in just the top SKU (e.g. iPhone X) have also played a key role in boosting Apple's revenues and even making some of its suppliers richer (see here)
• Even at the estimated almost flat annual volume share in 2018, Apple is well-positioned this year to generate a "Revenue Super Cycle" taking iPhone generated revenues to record levels