iPhone X Launch Met With Long Lines, Excitement in Palo Alto

Excitement was palpable early Friday in downtown Palo Alto in the moments leading up to Apple's much-awaited iPhone X launch.

Employees clapped and counted down alongside a smiling CEO Tim Cook, who opened the store's doors, hugging and shaking hands with the first customers, and taking selfies with others.

The iPhone X's lush screen, facial-recognition skills and $1,000 price tag are breaking new ground in Apple's marquee product line.

"The Super Bowl for Apple is the iPhone X," GBH analyst Daniel Ives said. "That is the potential game changer."

People in the Bay Area, apparently undeterred by the steep cost, waited days to get their hands on the iPhone X. A handful of people were spotted setting up chairs and sleeping bags on the Palo Alto sidewalk nearly 48 hours prior to Friday's unveiling. Nearly 100 chairs joined them on Thursday, despite the oncoming storm. 

Excitement was palpable early Friday in downtown Palo Alto in the moments leading up to Apple’s much-awaited iPhone X launch.

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. 

Even with the iPhone X's delayed release, Apple is still struggling to catch up. Apple is now giving delivery times of five to six weeks for those ordering in advance online (limited supplies will be available in Apple stores for the formal release Friday). Most analysts are predicting Apple won't be able to catch up with demand until early next year.

The company was optimistic.

"As we approach the holiday season, we expect it to be our biggest quarter ever," CEO Tim Cook said on an earnings call with analysts Thursday. He added that the company is increasing its iPhone X production capacity every week.

On Thursday, Apple predicted revenue for this quarter from $84 billion to $87 billion. Analysts, who have already factored in the supply challenges, expect $85.2 billion, according to FactSet.

Analysts are expecting Apple to ship 80 million iPhones during the current quarter, which includes the crucial holiday shopping season, according to FactSet. That would be slightly better than the same time last year.

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.

"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. 

Copyright AP - Associated Press
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