Will punters buy Apple's new iPhone Xs Max, priced up to $2977? Analysts are wary, but market data figures show that Kiwis - and punters worldwide - have displayed a suprisingly strong taste for the new category of "ultra-premium" phones.
On the face of things, the latest quarterly shipment stats from market tracker IDC point to a New Zealand smartphone slowdown.
There were 437,841 smartphones moved in the June quarter, a dip on the 441,991 in the same period last year.
But total smartphone market revenue jumped from $279 million to just under $300m as those who did upgrade moved toward more expensive models.
There was a big jump in shipments of so-called "phablets" or phones that are so big they can serve as mini tablets (IDC defines a phablet as any phone with a display larger than 5.5 inches; at the bottom of the heap are so-called "feature phones"; cheapie models that still have a physical keypad).
It was a trend reflected world-wide as analysts who predicted Apple's iPhone X, which broke the $2000 barrier when it was released last year, was just too expensive. A wave of trade-press reports from alleged insiders said sales had been slower than expected - only to be confounded by Apple's report of record revenue and profit on July 31. Apple did not break out iPhone sales by model, but given unit sales increased 1 per cent but revenue jumped by 20 per cent, it was obvious buyers were taking to the X.
Smartphone prices have been creeping up for the past couple of years. Newer brands like Huawei and Oppo have kept their top models close to the $1000 market.
But Apple and Samsung (whose new Galaxy Note 9 sells for up to $1999) have pushed the limits.
Thanks to their ambitious pricing, the pair have IDC's new "ultra-premium" category of $1400+ phone shipments to themselves.
Samsung has been gaining on Apple. Yuen says in the second quarter of last year, Apple totally dominated ultra-premium. But by the June quarter this year, Samsung had jumped to a 48 per cent share of $1400-plus shipments.
In the process, the ultra-premium pie has got larger. Yuen says the category accounted for 4 per cent of the market in the 2017 June quarter. This year, it was 11 per cent.
Yuen says he expects Samsung to continue to do well on the back of its S9+ and Note 9. But in the tail end of the September quarter and the Christmas quarter (always the busiest of the year), its top-shelf Galaxy line will face strong competition from Apple's new iPhone Xs, Xs Max and XR as the US giant's annual release cycle kicks into high gear again.
Apple and Samsung have also dominated the broader smartphone market (see chart above), with only relative newcomer Huawei plus house brands from Vodafone and Spark gaining any meaningful market share as the likes of Sony, LG and HTC struggle.
Yuen also notes that while more people are buying more expensive phones, they're also holding on to them for longer. As the market matures and it gets harder and harder for Apple and its rivals to come up with "killer" features to compel upgrades.
Research conducted by IDC in 2015 found that, on average, people upgraded their mobile once every 2.6 years. The same survey repeated this year found people held on to their mobile for an average of 3.7 years.
Against that, smartphone prices have been climbing, and IDC forecasts they will continue to rise by 5 per cent per annum for the next five years.
Yuen describes Apple's original iPhone X, first released in November 2017 as "a proven success in the New Zealand market. In the first half of 2018, the X range was the most popular smartphone range on the market, making up 8 per cent of the total market share alone," he says. That's a remarkable result for a series priced from $1800 to $2100.
So what are the prospects for the $2799 iPhone Xs Max?
There is that daunting price, of course, which Yuen notes is now comparable to a high-end laptop.
The IDC analyst also says that with the trend for people to own a phone for longer, Apple could be the victim of its own success, with many happy to hang on to the original X for a bit. Apple convinced consumers it was worth paying $2000+ for quality, and people expect a high-quality product to be durable, he says.
He also notes that Apple is in the "S" year of its two-year product cycle, where it makes tweaks rather than overhauling the design (apart from its larger display, in physical terms the new iPhone Xs Max is nearly identical to the original X).
"Looking at historic data, 's' or otherwise incremental improvement models from Apple have underperformed their original counterparts," Yuen says.