Rosenblatt’s Jun Yhang suspects customers are waiting for the cheaper iPhone Xr.
From a note to clients that landed on my desktop Friday morning:
We performed channel checks in relation to initial online and offline preorder data for the new iPhones that were announced on September 12. Compared to the last few years, our research tells us that first day preorders in China for the iPhone XS and iPh- one XS Max is weaker than previous iPhone launches.
- China Mobile’s online portal, which had about 20,000 preorders on the first day. We also expect there to be an additional 50,000-60,000 preorders through China Mobile’s offline channels. This is weaker than other iPhone models, such as the iPhone 6, iPhone 8, and iPhone X.
- JD.Com’s data, which suggests preorders for the iPhone XS and iPhone XS Max was ~2200 and ~8300 units, respectively, in the first hour of preregistration, even with the company selling the dual SIM iPhone XS and iPhone XS Max. This data also shows preregistration in the first hour was weaker compared to the iPh- one X released last October.
We believe the weakness in preorders for the new iPhone models is attributable to:
- The dual SIM iPhone XS and iPhone XS Max selling through the open market, in- stead of through operator channels.
- Consumers waiting for the release of the iPhone XR.
- Smartphone subsidies from Chinese operators largely declining year-over-year, making for less interest from consumers to buy from operator retail channels.
We will continue to track China Mobile, JD.Com, and other online channels over the next few weeks in order to get the full picture. We do believe that the big difference in price, compared to older iPhone models (iPhone 6, 7, and 8), is having a significant impact on sales, so it may be difficult to compare to later iPhone models.
Maintains Buy rating and $200 price target.
My take: Zhang did a similar count last year and correctly predicted that the iPhone X would outsell the 8 and 8 Plus.
The goal is revenue and net income. Considering the huge increase in iPhone XS/Max ASP this year vs last year I’m not concerned about lower preorder counts, especially when the iPhone model everybody expects to be the big seller not shipping until late October.
Who DIDN’T expect there would be this sort of hypothetical crud thrown out? It’ll be months until we know the facts. Nobody knows this stuff except Apple, and they’ll only tell us in dribs and drabs.
We Apple longs need to relax and enjoy the sleigh ride.
Jun Zhang is yet another in a long line of Apple FUDD disinformation purveyors. He had a price target of 180 on Apple for a long period of time. When Apple went almost 50 POINTS over his price target, he raised to 200.
Anything out of Jun Zhang’s mouth is meaningless. I would do the exact opposite of whatever he says to do.
Then again, the gold colored iPhone and Watch are far more appealing to the Chinese consumer than previous iterations of gold.
Personally, I had to think about whether or not pre-sales began last night or tonight. Eventually, I went to the Apple Store to check what it said, and the Store was down, meaning that Pre-sales were that night. The gap between Event and pre-sales seemed short. Maybe, it’s just me or I was busy, but I usually like to mull over the decision for about a week.
In the end, I ordered online from the Verizon app, since they seemed to open a couple minutes before 3:00am, and were offering $50 off a Watch and iPhone purchase.
Gimme a break, Jun Yhang!
It’s way to early in the game to have anything worthwhile to say. … but don’t let that stop you.
“Wise men speak because they have something to say; fools because they have to say something.”
― Plato
And then there’s this article from Motley Fool and Evan Niu
“Demand for Apple’s New $1,100 Phone Appears Strong”
(Sorry, no link. I keep getting sent to limbo when I post a comment with a link….)
Money quote:
“Pre-orders for the iPhone XS, iPhone XS Max, and Apple Watch Series 4 started today, and initial demand appears strong…Shipping estimates for the iPhone XS Max are already slipping into October for many configurations…”
So exactly how does Mr. Yhang’s opinion square with this fact? It doesn’t. If shipping dates are already into October, then I’d say that’s hot demand, regardless of where the demand is coming from. Maybe people aren’t waiting for the Xr. Maybe they’re waiting because their stuff won’t be shipping for a month – or longer.
And then there’s that statement “This data also shows preregistration in the first hour was weaker compared to the iPh- one X [sic] released last October.”
You mean the extremely limited initial shipment of iPhone X’s? It’s weaker than that? Pull the other leg!
Anybody can say anything in the day and age of fake news. This guy could give Donald Trump a run for his money in that regard….
Oh, and just to show you how much effort Mr. Yhang put into his article, the iPhone X shipped/released in November, not in October….
It’s too early to make much of Jun Yhang’s sample in one market, albeit a big one for Apple. I personally noted better availability of the Xs models when things went online Friday at 12am. Improved availability at launch is no doubt due to manufacturing ramp of a very similar model in production over the past year.
I even questioned upgrading myself, from a X to a Xs. In the end, I did. Like some others, I’m a bit more excited about the Watch, which sold out when I finally got online at 12:05. My scheduled delivery is October 2. I like Jony Ive’s comment regarding the Watch: “‘Every Bone in My Body Tells Me This is Very Significant.” I agree 100%
My issue is with the “Buy” recommendation. It doesn’t make much sense with a price target of $200. Who would pay $224 per share today if it’s $200 a year from now. Did Jun mean $300? 🙂