From a note to subscribers by Loup Ventures' Gene Munster:
iPhone X supply improved materially over the past week both in-store and online. We now believe iPhone X will be near global supply demand equilibrium by the end of December or early January. Previously, we had anticipated iPhone X would reach global supply demand equilibrium by mid- to late-January. This means the Mar-18 outlook will have only a fractional bump up from December iPhone X demand getting pushed in the Mar-18 quarter. We believe the bigger story is that the Street is under estimating the positive ASP impact from the iPhone X over the next few quarters, which should play out as a positive to the Apple story. Our FY18 overall iPhone ASP is $740 vs. the Street at $705.
From friend-of-the-blog Chuck Jones, writing in Forbes:
- On Friday, October 27th, the first day that orders were taken for the X, its lead-time was 5 to 6 weeks.
- A week later on Friday, November 3, when it first started shipping the X’s lead-time had fallen to 3 to 4 weeks.
- It only took 1 1/2 weeks after first selling for the lead-time to drop to 2 to 3 weeks and
- After just under a total of 3 weeks it was at 1 to 2 weeks
- It yo-yoed between 1 to 2 and 2 to 3 weeks for a couple of weeks and
- Settled at just over a week a week ago
- It stayed there until yesterday when it dropped to 4 to 6 days, except for T-Mobile
My take: How did Ming-Chi Kuo get this so wrong?
UPDATE: Could this be a sign of weakening demand? See FUD and anti-FUD.
Please reassure me that these recent data points are due to increased production capacity and not disappointing demand for the X falling off a cliff. I already know how Wall Street will interpret this. The real tell will be, of course, earnings for the current quarter and next quarter guidance. We won’t know for sure until late January/early February. Any thoughts?
Thanks,
Dr. Scott
We are wise ignore flash reports, and especially rumors from folks like Ming-Chi Kuo. Likewise ignore Wall Street’s reactions. Rather consider that the iPhone Installed Base market share keeps rising vs. Android, despite seasonal and cyclical shipment variations, and the Apple Watch is the killer in a new category, and that Services CAGR indicates that Services will double every 3 or 4 years, and that some iPhone X capabilities will arrive on iPads and lower priced iPhones over the next two years driving more upgrades, and that any dip in AAPL means Apple buys back more shares concentrating future EPS. Besides all that, Apple likely has more surprises, in stealth.
I was awake unusually early on Saturday, December 2, so I went online to reserve on at Apple Knox Street. The “experienced reader” trick is to recall old articles about tracking iPhone inventory from morning to evening and back (shipments of new inventory are logged overnight), and to realize that the best time to make your reservation (regardless of when you intend to actually pick up your product) is in the morning.
I saw the phone I wanted in inventory, ordered it, and walked into the store and walked out with my new phone that very same day. I don’t know how Apple can expect to run a successful business that way! 😉
That store is pretty close to me, so I pass by it fairly regularly. It’s been very busy lately.
Because he is an attention grabbing blowhard, loved by the media for his click generating “research notes”.
The bigger question to PED’s above is why does the media justify referring to Ming as “respected”, “well connected”, “knowledgeable”, and other undeserved superlatives.
To answer the inevitable question: No, I do not like Ming. His “research” has harmed many. Ming is an idiot or a liar, either way I think his conduct is unconscionable. Certainly it dooen’t conform to an “analysts” fiduciary responsibility to investors.
If your numbers become reality (I think they will) then Apple will report about $87.9 Billion in revenue.
Sell through for the March quarter will be about 60 million.
I arrived at these estimates by averaging Q1 to Q2 units sold deltas for FQ2/2014, FQ2/2015, FQ2/2016 and FQ2/2017. I believe the seasonal reduction in unit sales calculation to be overly aggressive, due to current pent up upgrade demand. So I wouldn’t be surprised at all should FQ2 and FQ3 iPhone unit sales exceed my current estimates.