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iPhone XS Buyers Undeterred by Eye-Watering Prices, Few Upgrades

Mark Gurman, Stephen Tan
Apple store staff greet customers looking to buy the latest iPhone models, in Hangzhou, China, on Sept. 21. Photographer: AFP via Getty Images

The iPhone XS is up to $200 more expensive than last year’s already pricey iPhone X and represents one of the smallest advances in the product line’s history. But that means little to the Apple Inc. faithful or those seeking to upgrade their older iPhone.

Hundreds of consumers lined up at Apple stores around the world either the day before or in the early hours before the iPhone XS and iPhone XS Max went on sale Friday. Many consumers were seen lining up at the Orchard Road store in Singapore despite the hot weather. Other outlets, such as the IFC mall in Hong Kong, had much shorter lines as sales were largely restricted to those that had already ordered.

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This year’s models include dual sim-cards for the first time, a popular feature on Android devices in Asia. That’s what appealed to Li Jun, who works for a trading company in Guangzhou and traveled to Hong Kong to pick up an iPhone XS for HK$9,899 ($1,265).

“iPhone XS is expensive for me, but I just can’t resist the new dual SIMs feature," Li said. “The feature allows me to have a local SIM card installed when I work abroad, without taking out my Chinese SIM card.”

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The global smartphone industry has stalled at about 1.5 billion devices sold each year. But the annual theater of iPhone launch day remains a bright spot. For Apple in particular, the length of lines have becoming less important as it sells more phones online and adjusts its business model. Rather than persuading users to upgrade to the most-advanced, expensive phone each year, Apple’s goal these days is to steadily raise average prices, while expanding the total number of active devices to support sales of accessories and digital services like streaming music and video.

This year, many consumers ordered online so that they’re delivered on launch day. But those who missed the opening of pre-orders last week have to visit a physical store to get one on the first day. In the U.S., new online iPhone XS orders aren’t arriving until between Oct. 4 and Oct. 11. Wait times are similar in Hong Kong and Australia, while deliveries are taking one to two weeks in Mainland China.

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Those waiting times are shorter than last year when the iPhone X went on sale. But those looking for the latest Apple Watch aren’t so lucky. New orders of many of the new Watch models won’t arrive until the end of October in the U.S., while orders from China are seeing a 3-4 week wait time. Consumers likely feel they’ll have better luck grabbing one from a retail store.

This year’s demand isn’t as extreme as the early years of the iPhone, or even last year with the iPhone X. The iPhone XS and iPhone XS Max have faster processors, camera improvements, and the Max offers a bigger screen. But none of the enhancements are significant unless a user upgrading a much older iPhone.

This year’s iPhones are some of the most expensive smartphones on the market. In the U.S., the iPhone XS Max with 512 gigabytes of storage costs $1,449. The overall price range is $449 to $1,449 now, up from $349 to $1,149 previously.

The focus on pre-orders led to disappointment for some. Cao Zhongqiang from Shanghai was told he couldn’t get any devices on the first day without an existing order.

“I hoped I could walk in and buy one, however I was told supply for on-site purchase is insufficient,” Cao said in Hong Kong.

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