Apple souffle: Who’s behind Nikkei’s supply chain leaks?

Neil Cybart has a theory.

From a note sent to Cybart’s Above Avalon subscribers Tuesday:

Apple has a known problem at Foxconn where a third-party entity is collecting intel from Foxconn workers and then selling that information to those hungry for scoops and insights into Apple’s product plans.

My theory continues to be that KGI Securities (analyst Ming-Chi Kuo), in addition to a number of other financial shops, is buying this information. My complete Ming-Chi Kuo theory was published back in July. This explains why Ming-Chi Kuo’s track record is pretty good when it comes to rumored flagship iPhone features, while his accuracy declines for Apple products not assembled at Foxconn.

Whoever is selling this Foxconn information apparently has been talking to a decent number of people. A few sell-side analysts cut their iPhone sales estimates in recent weeks citing the same reason: lower-than-expected iPhone X sales in 2Q18… It’s interesting how iPhone estimate cuts always seem to occur around the same time iPhone production plan information is leaked out of Foxconn.

Given how there is a well-established leaking network at Foxconn, we shouldn’t ignore Nikkei’s iPhone X article. However, that doesn’t mean that we should accept the Nikkei’s interpretation of the situation.

My take: That’s the dilemma. Whether these reports are smoke or real fire, you can’t ignore them. Thursday can’t come fast enough.

3 Comments

  1. Fred Stein said:
    Is there a problem?

    According to CIRP, the iPhone X sales in US were about 20% of iPhone. According to Nikkei, iPhone X is being slashed from 40M units to 20M units. The most logical explanation is that 40M iPhone X unit forecast is bogus, a red herring.

    1
    January 30, 2018
    • Stephen Young said:
      @Fred- Totally agree. It as if everyone forgot the number of iPhones reported sold in fiscal 2017 Q1 & Q2 (78.3M and 50.7M). If apple sold 40M Xs in Q1 and 20M in Q2 and then add 8, 8+, 7, 7+, 6, 6+ and SEs both quarters would quite exceptional.

      0
      January 30, 2018
  2. Gary Morton said:
    Usage data from Mixpanel would indicate that since the start of Apple’s fiscal Q2, the change in iPhone X usage as a % of total iPhone usage has represented 37% of the increase in usage for the latest generation of phones (X, 8+, and 8). If we use the $20M figure for iPhone X production, we would then expect total latest generation production in the quarter to equal roughly 54Million. That would not include any sales of newly built 7, 7+, 6S, 6S+ or SE units. So, Apple is looking at a large total iPhone number for FYQ2. Given the math and even accepting the worst case numbers from Nikkei, I am not sure what all the fuss is about. It looks like the 8 and 8+ are more popular than Apple initially anticipated. Ok, this is not a disaster. Moreover, I also don’t think product mix is mostly about the change to user interface. I own a X and love it, no home button is simply better, but I do miss the slightly larger 16X9 view screen of my 7+.

    2
    January 30, 2018

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