iPhone X yields improved ‘slightly’ in October

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.


  1. Gregg Thurman said:

    Average daily iPhone production (all models) of the last three years is 851,000.

    Zhang’s low range number for the entire December quarter (during which the iPhone X will only be available for two months) is 20 Million, or 333,000 per day for two months.

    Starting with the iPhone 6 new model iPhones accounted for about 70% – 75% of total units sold during the December quarter.

    Twenty Million iPhone X units, a handset with a starting price of $999 equals a whopping 29% of total iPhone units sold during the December quarter. Zhang is a Bear? If he is he’s a confused Bear. I think of him as a Buy Side analyst (vs Sell Side).

    I am bullish on Apple/AAPL with a January price target of $186 based on Revenue of $89.102 Billion and EPS of $4.07, yet my iPhone X unit estimate is a mere 10 Million units.

    If we actually see Zhang’s 20 Million number, Revenue will increase to $89.887 Billion with EPS of $4.12.

    In my opinion any estimate above 20.000 iPhone X units is a pipe dream, although I’d be very happy to see it happen. Oh, my iPhone unit sales estimate is 84.604 Million (no matter how many iPhone Xs are sold).

    The issue of iPhone X production problems (I don’t think there were any) will be solved when Apple provides December quarter Guidance on November 2.

    October 11, 2017
  2. Gregg Thurman said:

    “In my opinion any estimate above 20.000 iPhone X units is a pipe dream, ”

    Should have read:

    In my opinion any estimate above 20.000 Million iPhone X units is a pipe dream,

    October 11, 2017

Leave a Reply