iPhone 8 appetite ‘anemic’ says Rogers CEO, as company prepares to sell iPhone X

TORONTO – The head of Canada’s largest wireless carrier said Thursday the appetite for the Apple iPhone 8 smartphone is “anemic” as the company gets set to take orders of the iPhone X next week.

Rogers Communications Inc. CEO Joe Natale said on a conference call that the company will begin taking orders of the “very expensive” iPhone X on Oct. 27 and will begin sales the following week, on Nov.3. The iPhone X will be Apple’s most expensive smartphone to date, which will retail in Canada for almost $1,300.

However, he added, device availability is “a question mark” and the full impact of the new devices might not be felt until the first quarter of 2018, adding to concerns about soft sales for Apple devices.

Analysts attribute iPhone 8 sluggishness to the pending release of the iPhone X.

The current iPhone 8 and iPhone 8 plus had a two per cent share of the U.S. iOS device market nearly a month after their launch, significantly lagging the five per cent share grabbed by the iPhone 7 and iPhone 7 plus at a similar point last year, according to Localytics, a mobile engagement platform that analyzes iPhone adoption rates.

The iPhone 8 went on sale on Sept. 22 in Canada.

During the call, Natale said it was the wireless services — rather than sales of devices like smartphones — that was the main area of growth for Rogers Wireless.

Natale added that he’s not concerned about a new pricing initiative being promoted by Shaw’s Freedom Mobile.

Freedom announced this week that it’s now offering 10 gigabytes of data for $50 “with no penalties for data overages.”

While the rival service’s announcement says its new Big Gig plan is “unlike anything currently being offered to Canadians,” Rogers CEO Joe Natale said he viewed it as “business as usual.”

“First of all, we have always competed with Freedom on price. This appears to be an extension of this strategy, with a lot of marketing bravado behind it,” Natale told analysts in a conference call Thursday.

“It wasn’t long ago that they had an 80-gig package for about sixty bucks, and it was kind of benign in terms of its impact. So I would look at it as a business-as-usual situation.”

“The goal would be to leverage our ability to get customers in the right data plan,” Natale said.

“The key is: customers’ appetites for data are growing 40, 50 per cent per year. We’d rather have them in the place where they’re in the right data plan or they can occasionally have a top-up if they see fit.

In the third quarter ended Sept. 30, Roger’s profit grew to $467 million, driven mostly by the strength of its wireless business and incremental progress at its cable and internet division.

Rogers Media was the only major division to report a decline in revenue, which was down three per cent from the third quarter of 2016, when Rogers benefited from the World Cup of Hockey.

Rogers also announced the media division’s adjusted operating profit fell 18 per cent, primarily due to a higher Toronto Blue Jays player payroll and lower publishing-related revenue.

During the call, one analyst asked whether Rogers was considering a sale of any non-core assets.

Natale replied that Rogers is committed to look at “ways of surfacing value from our portfolio assets, whether it be the Jays or some of our other investments.”

“We don’t have any plans at this moment that we are announcing or even giving a nod to. Our focus, very much, is on our core business.”

Rogers reported its net income for the three months ended Sept. 30 amounted to 91 cents per diluted share, up from $220 million or 43 cents per share last year.

On an adjusted basis, Rogers earned $523 million or $1.02 per share for the quarter, up from $427 million or 83 cents per share a year ago.

Revenue totalled $3.58 billion, up from $3.49 billion in the same quarter last year.

Rogers also raised its guidance for the growth of its adjusted operating profit for 2017 to between five and six per cent compared with its original expectations for growth of two to four per cent.

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