But Apple’s share price is still headed south, says one of the company’s most bearish analysts.
From a note to investors by Rosenblatt Securities’ Jun Zhang that landed in my inbox Wednesday:
iPhone X Yield Rate Slightly Improved in October
Our industry research suggests that Apple may have solved a 3D sensing module issue from failed Murata components and our research around Hon Hai suggests the company is raising its weekly production to 400K units per week from 100K units per week,, indicating to us that the module issue has been solved..
We believe that the yield rate of the 3D sensing module assembly at LG’s Innotek remains at 70%, which could be difficult to improve but would be a positive for 3D sensing component suppliers as it could require an increase in order size to compensate for the lower yield. We do not believe the wildfires in California, which are close to Viavi’s factory, have impacted Viavi’s supply to Apple at this time.
We believe the metal casing issue still stands in the way for an iPhone X production ramp — we will continue to closely monitor the supply chain for updates on this concern. We currently model 20 million and 50 million iPhone X shipments for the December and March quarters, respectively, based on our current visibility into the production ramp. We believe the next three weeks be critical to iPhone X production, and if Hon Hai is able to ramp production to 1 million per week in late October, Apple could reach the production ramp point sooner in November.
Zhang reiterates his Hold rating and near-Street low $150 price target.