“It’s going to be one of the more entertaining quarters,” says the veteran Apple watcher, now at Loup Ventures. “Something doesn’t add up.”
[Reposting to get around paywall problems.]
In a phone call the day of the Nikkei report, Gene Munster talked about what he thought was going on.
Two things. One is natural concern about the supply chain and some of the chatter that happens in any cycle. Sometimes that chatter gets to the point where it becomes concerning. Some time in the past week we crossed that point. There’s just too much smoke out there.
My experience is that when the supply chain itself starts reporting negative things about iPhone demand, that’s when there’s a problem. I haven’t seen that. I’ve seen a few scattered data points, but I haven’t seen the companies themselves saying negative things. I’ve seen people speculating about the supply chain. But the actual formal statements have been positive. The one this morning from AMS was very positive.
Another piece is just what we typically see during the introduction of a new form factor. This is part of the reason why this quarter is so entertaining—because we kind of have a new form factor and we kind of don’t. Typically when you have a new form factor, demand tends to be better. And then there’s this debate about availability and whether that’s really a read-through for end demand. I think it is.
Taking this at the 1,000 foot level, it doesn’t seem to make a ton of sense that they would be cutting supplies given that supply was tight for the iPhone X for the majority of the quarter. There are natural supply cuts, because you have seasonality—they’ll sell a lot less iPhones in March than December. But cutting more than people thought doesn’t line up with what we observed during the first two months of availability.