Rookie Apple mistakes: 60 million AirPods, 100 million iPhones

Be prepared to manufacturer this many million units, Apple tells its suppliers. The number of units Apple actually ships is a different, smaller number. Tech reporters should learn to tell the difference.

Last Thursday, Bloomberg's Debby Wu reported that Apple was expected to ship 60 million AirPods in calendar 2019, up 100% from 2018. Neil Cybart, who has a track record a lot longer than Wu's, puts the number at 43 million, up 87% from his 2018 estimate.

As Cybart put it in Monday's Above Avalon ($):

The difference between 43M and 60M pairs of AirPods is too large for this to be a difference in opinion as to how AirPods demand will trend over the next five weeks.

My thinking is that something may be getting lost in translation with this Bloomberg report. Are the leaks from the AirPods supply chain referring to production capacity? That certainly would make a whole lot more sense. Apple has the capacity to produce up to 60M AirPods in CY2019 with a portion of that total meeting the standards for being shipped to customers.

In a similar vein, AppleInsider's William Gallagher reported Monday that "Apple expects to sell over 100M 5G iPhones in 2020." But his headline was undercut in the next line:

An unconfirmed report in Digitimes claims that Apple is advising its suppliers that it will be producing in excess of 100 million of the next iPhone, a rise of around a fifth over 2019's estimates.

See what happened there? Sales and production capacity conflated right before our eyes.

My take: Sales and production capacity are two different things. Tech reporters should know the difference.

10 Comments

  1. Turley Muller said:
    I had the same reaction when I read that 60M unit number. Way too high to be a sales figure. Production is always higher than shipments, and orders are just orders. Apple regularly over-orders JIC – knowing it’s easier to cancel orders than it is to boost them last minute.

    1
    November 26, 2019
  2. Fred Stein said:
    Yup, agree, and add: Apple ramps manufacturing to unprecedented quantities at unprecedented quality adhering the highest ethical standards. The world has never seen anything like this. Innovation? Yup!

    2
    November 26, 2019
  3. Gregg Thurman said:
    I don’t believe anyone comes close to Apple’s production capacity for high end products.

    For years I maintained a database that compared each quarter’s unit sales to full year unit sales.

    Doing this I discovered a factor, that when applied to FQ1 unit sales (product irrelevant) came within 1% of full year unit sales.

    What this subject clearly illustrates is that today’s “tech journalists” know nothing about their chosen subject, and have no desire to do more than superficial “research” before spewing forth crap.

    Anybody that relies on the media for investment knowledge is a fool soon to be separated from their money.

    1
    November 26, 2019
    • Gregg Thurman said:
      How many times does DED have to out incompetent, bias led bloggers, before the mainstream media stops repeating, reporting their crap?

      1
      November 26, 2019

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