From a note to clients by Jun Zhang that landed on my desktop Wednesday:
After the first two weeks, we believe the iPhone XR sell-through rate continues to be weaker than we initially expected. This leads us to believe that Apply may begin another round of iPhone XR production cuts for C4Q. We believe Apple may reduce production for the iPhone XR by an additional 4-5 million units for C4Q. We also believe the company may increase iPhone X production by 1-2 million units due to iPhone X promotions for the holiday season by some telecos.
We also believe component pull-ins are slowing down this week. We believe some Printed Circuit Board (PCB) supplier shipments of HDI boards were quickly dropped this week. This may be attributable to quality issues from Skyworks PAs. We believe this potential round of iPhone XR production cuts by Apple may be attributable to the recently found PA quality issues.
We think it is rare for Apple to make such dramatic production changes before the holiday season. We also believe component inventory levels are not high at Apple. We will continue to track iPhone holiday season sell-through rates in order to see if the production cuts are more attributable to Skyworks’ PA quality issues or if Apple is taking a more conservative approach to prepare for further softness in demand.
My take: First I’ve heard of a problem with Skyworks’ boards.
See also:
Didn’t Mr. Zhang get the memo? Apple’s back in the market, and the herd is no longer as susceptible to panic. True, Apple will in future no longer break out device sales, so manipulators like Mr, Zhang can make up all kinds of nonsense without being held accountable. But really, they were only ever held accountable briefly every three months, and few seemed to care even then.
It is patently obvious that propaganda has a value to various vested interests. But all propaganda is actually able to do is paper over the facts. And facts have an annoying habit of showing up anyway, one way or another, sooner or later. Apple’s job is to stick to it’s knitting, at which it is simply unmatched and possibly even unmatchable. Over time, reality will assert itself, to the benefit of Apple and it’s owners.
Ugh, Aren’t we tired of XR rumors?
Apple won’t ever give us visibility at even the aggregate iPhone level. So we’ll never resolve the rumor issue.
But more to the point, the XR competes with many new and used iPhone options at that price band, many of which have telephoto, such as a used iPhone X. And, surely the XS Max’s is on a lot of holiday gift lists. Hence sales of this one model, XR, doesn’t mean much.
BTW, it’s night and day when Apple comes back into the market – and not just for Apple! A lot of beaten down stocks are going up today, and of course the claim is that it’s because of the election. Well, the removal of uncertainty is definitely a positive, but I don’t think it is coincidental that this is the second day in a row since Apple very firmlly switched directions, and the market switched right along with it.
Apple longs are solidly benefitting from the running down of AAPL, as it lets Apple pick up off the ground bushels and bushels of very, very cheap AAPL’s, which the panicking market herd animals were far too quick to discard. I think 4.5 B shares is now well within range this fiscal year, and 4 B shares within 3 years. It’s no longer inconceivable that they could actually succeed in cutting their float in half before they’re done, and at a price far below fair valuation.
It’s simply astounding that the market could let this happen.
Today’s trading volume is way down from last quarter’s daily average and AAPL is going up.
To me, this means the sellers have been cleared from the decks, although buyers aren’t in great supply.
So far today (2:00 PM EST), according to the WSJ, the institutions are not buying (leastways not blocks of shares). I think buyers (especially the institutions) will get more aggressive acquiring shares starting next week (after all the dust has settled).