Rosenblatt trims iPhone XR estimate by 6 million units

Jun Zhang, who blows hot and cold on Apple, blows cold.

From a note to clients that landed on my desktop Monday:

After tracking sell-through data from various retail channels, we believe initial iPhone XR sales are weaker than we expected and weaker than XS/XS Max sales. We estimate global first weekend sales of the iPhone XR to be ~9 million units, 1 million units lower than sales of the XS/XS Max in the first weekend. Compared to the iPhone 8/8Plus, we believe XR sales are better, although the 8 Plus faced some constraints and a smaller sell-through base.

We are trimming our iPhone Production and shipments by 6 million units for Q4. We previously modeled new iPhone production of 90-95 million units and shipments of 80 -85 million units. We are revising our estimates to show new iPhone production of 88 million units and shipments of 76-77 million units for the second half of this year.

For the March quarter, we are modeling new iPhone production to drop 40-50% q/q. We estimate 36-37 million units produced and 35-36 million units shipped in the March quarter.

Combined with older models, we estimate C4Q iPhone shipments to be 82 million units, flat y/y from the 82 million units shipped in 4Q17. We model C1Q19 total shipments to be ~45 million, flat y/y.

Maintains Buy rating and underwater $200 price target (which makes no sense to me)

My take: Cowan's Ackerman and Ramsay, looking at the same supply chain, are more bullish today. See here.

UPDATE: There's been some confusion about Zhang's iPhone shipment numbers. According to the January 2017 earnings report, Apple shipped 78.29 million iPhones in calendar Q4 (fiscal Q1).


  1. Patrick Beyrouti said:
    Dear Author, please check your numbers, Apple sold 77 million in CQ4/17 NOT 82 as you state. Apple reports fiscal year quarters , and that is Q1FY18 , for you to verify.
    They never achieved 82 million in one quarter , but if they actually do this coming Q1FY19, it will be great especially coupled with an even better ASP this year . Last years ASP was $796 , so this year I expect it to be at least $825, so the revenue generated by iPhone alone will be at least $68 billion . Hopefully the rest of the business brings in at least $27 billion and we are closing in on $95 billion for the quarter. some may say even $100…..

    October 29, 2018
    • Robert Paul Leitao said:

      That’s correct. In FQ1 2018, Apple shipped 77.316 million iPhone units. Apple also reduced global channel supply by 3.5 million units in the June quarter (FQ3 2018) as the company prepared for the production and shipment of new product in September. The only caution I have about ASP estimates at this time is the impact of forex challenges. Reports indicate early sales of XS series handsets were heavily weighted in favor of higher priced, higher storage configurations.

      October 29, 2018
  2. Robert Paul Leitao said:
    Not that I summarily dismiss an analyst’s estimates lightly, but in my view his unit production and shipment numbers are as nonsensical as his $200 price target matched with a “Buy” rating. Sorry. In my view the numbers don’t make much sense. There’s a large global channel to supply with product. Of course first weekend sales of the XR were below the first weekend sales of the XS/XS Max. It’s October.

    October 29, 2018
  3. Gregg Thurman said:
    I should get up earlier in the morning. Patrick and Robert both caught Zhang’s erratic logic before I had finished my first cup of coffee.

    October 29, 2018

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