“Some of the downward revisions to June quarter estimates… based on supply chain data seem overly pessimistic and are occurring very early in the quarter.” —BTIG analyst Walter Piecyk
From “The Handwringing On Apple’s Guide For The June Quarter Kicks Into High Gear,” a note to clients that landed in my inbox Friday:
We are 20 days into the June quarter and supply driven data points have already sparked concerns about Apple’s FQ3 guidance when they report on May 1st. There is certainly evidence to suggest that upgrade rates remain low and operator promotions continue to evaporate, which will provide a headwind to the June quarter. However, it’s unclear if it will be as dramatic as forecast and there are some positive data points emerging on ASPs.
We profiled Wave7 Research’s latest survey on the US market, [which] implied a positive trend in the mix of iPhones to newer models, providing a positive indicator for Apple’s ASPs.
- The iPhone 8 recaptured its spot as the top selling iPhone in April after falling below the iPhone 8+ in March, when operator promotions favored the 8+.
- The mix of iPhone X increased again in April to 28.4%, its highest share to date.
- The mix of iPhone X has increased every month since introduction in November 2017.
- Interestingly, legacy iPhone share declined by 200 basis points sequentially to 11.9%, which is their lowest level since the introduction of the iPhone 6S/6S+ in the fall of 2015 and are a positive sign for ASPs.
Buy rating, $198 price target unchanged.
My take: The consensus swings one way, and then it swings back.