Is the iPhone X in Trouble?

And is that $1,000 price tag to blame?

The new iPhone X is seen in the Apple Store Union Square prior to launch on November 3, 2017, in San Francisco, California.
Apple's iPhone X hit stores around the world Friday, drawing crowds in many locations and protests in others as the new flagship device hit stores in some 50 markets worldwide. / AFP PHOTO / Elijah Nouvelage        (Photo credit should read ELIJAH NOUVELAGE/AFP/Getty Images)
Wants you to want it. ELIJAH NOUVELAGE/Getty Images

We’re beginning to see signs that Apple is hitting a speed bump with iPhone X sales. The company’s $1,000 flagship phone, designed to herald a new era of the iPhone’s look, feel, and function, hasn’t been flying off shelves as quickly as anticipated. According to a report from the Wall Street Journal, sales demand is so weak that for the next two months, Apple plans to slice production of the handset by half, from 40 million to 20 million. Orders for some components have also reportedly been cut up to 60 percent.

Apple could set the record straight in its first quarterly earnings call of 2018, which is scheduled for this Thursday. However, Apple typically doesn’t break down sales numbers model by model in these reports, instead lumping iPhone sales together in a single category. And according to data collected by Flurry, a mobile analytics firm, as a whole the iPhone still bested other smartphone brands in terms of holiday sales activations. It just wasn’t the iPhone X leading that charge: A report from Consumer Intelligence Research Partners suggests that the iPhone 8 and 8 Plus, which were also introduced this past fall, accounted for 40 percent of Apple’s iPhone sales, compared to only 30 percent for the more expensive iPhone X, at least during the phone’s first 30 days on the market. And Apple is still expected to post record overall sales numbers for the quarter, which will include purchases of the iPhone 6, 7, 8, and X.

The iPhone X’s reportedly troubled performance is surprising, but not entirely unexpected. Early reviews of the iPhone X were largely favorable, giving props for its overall user experience, augmented reality features, and facial recognition chops, but dinging the handset for the unsightly notch at the top of the display. Some also lamented the lack of a home button, a staple of the iPhone design since Day One. Its price tag was perhaps its biggest drawback, although carrier payment plans (and Apple’s own upgrade program) now make that shocking upfront cost more palatable by splitting the cost into monthly chunks.

Despite those caveats, when it went on sale in October, many models of the iPhone X sold out in minutes. However, the fact that it sold out may have had more to due with limited supply than insane consumer thirst. At the outset, Apple had trouble meeting demand for the new phone; its first shipment only contained 46,500 units, and the company had to quickly ramp up its production efforts. Analysts originally predicted the iPhone X would sell between 30 and 36 million units, and Apple’s manufacturer Foxconn had to increase production tenfold to 400,000 units per week to accommodate that anticipated demand. Before that, Foxconn was producing 100,000 iPhones per week.

And though iPhone X sales seem to have slumped since the holidays—or even before that—Wall Street investors don’t seem overly concerned. They expect the average iPhone selling price to go up through March—an indicator that would mean more new, higher-end iPhones will sell compared to cheaper older models. Perhaps the iPhone’s much anticipated “super cycle” sales boom—every other year Apple typically has a dramatic surge in iPhone purchases, usually with the introduction of a new form factor—will be more of a slow but steady increase in purchases over the next few months, rather than the explosive sales spree and subsequent trickle we’ve seen from past iPhone launches. In general, the iPhone has reached a point where it’s very good; the lure of a new model’s exclusive features may just not be as strong as it was a few years back, when a new phone offered dramatic improvements over its predecessor. Consumers also may be less inclined to upgrade as frequently now that carriers don’t subsidize the costs of new handsets. With that in mind, the sales of the iPhone X—particularly if Apple retains that $1,000 price tag—could be a glimpse of what to expect from future iPhone launches now that the ground has shifted.

If Apple doesn’t specifically comment on these supply chain reports or on the iPhone X’s sales performance in detail on Thursday’s call, we may never know definitively how well or poorly the iPhone X really performed. The true test will be what we see from Apple’s next few handsets: Will Apple continue with this design and this pricing model, or will Apple retreat to a notchless, home button–toting hybrid of the iPhone X and iPhone 8? The iPhone X marked a significant departure from iPhones we’ve come to know over the last decade. Perhaps those changes were too dramatic for the average iPhone-wielding citizen.