From a note to clients by analyst Samik Chatterjee that landed on my desktop Sunday:
Early visibility into 2020/2021 iPhone product cycles are offering incremental reasons to be positive relative to volume implications, including raising our volume forecasts as well as our EPS estimates and price target. Key findings from our supply chain checks, include:
1) Apple is likely to launch four new iPhone models in September 2020 (one 5.4”, two 6.1”, and one 6.7”), including all four with 5G capabilities, but only two with ToF World-facing 3D Sensing;
2) Expect two mmWave capable models (also supporting sub-6 GHz); expect two lower-end models to support only sub-6 GHz;
3) Starting 2021, we expect Apple to smooth iPhone seasonality by shortening launch intervals and introducing two new iPhones in both 1H21 and 2H21; and 4) Updated BOM analysis points to an increase of $30-$40 for 2020 iPhones vs. comparable 2019 iPhones, more modest relative to investor expectations.
Maintains Overweight rating, raises price target to $296 from $290.
Two bar charts:
My take: Good on Chatterjee for showing iPhone installed base growth. Not every analyst does that.
ToF?
Could mean many things, I like Tales of Fandom, a video game.
https://www.acronymfinder.com/TOF.html
From a Texas Instruments explainer: “A 3D time-of-flight (TOF) camera works by illuminating the scene with a modulated light source, and observing the reflected light. … An imaging sensor designed to respond to the same spectrum receives the light and converts the photonic energy to electrical current.”
I’ve lived professionally in TI’s back yard for quite some time. Improving GaAs emitter and Si detector yield was a part of my job for a while. The thing I take from this is … nothing. The emitter detector part of the equation is nearly trivial. The 3D implementation and calculations are the real “it” of it. And putting it in a system small enough to fit in an iPhone is the border between science/technology and magic.
A 3D ToF camera paints a subject with a spectrum of light then measures the ToF of each light frequency within the emitted spectrum to create a 3D image of the subject.
The estimate of future iPhone sales and installed base is sheer guesswork. I also think it’s conservative.
@Joseph Bland: After purchasing my daughter’s new iPhone 11 this past Wednesday at the Apple Store, I received an email yesterday asking questions about the sales process. Essentially, the email inquiry from Apple was an evaluation assessment of my satisfaction with the purchase. Knowing my daughter’s previous smartphone experience, I proceeded to complete the evaluation assessment mainly because I was the purchaser of the device.
One question asked was if I (my daughter) was a previous Android user switching to iOS. I answered, “yes.” My initial reaction to the question was that it seemed redundant, since Apple easily can obtain a read-out of existing users in the installed base to get an accurate count. Then I realized that there are existing users in the install base count who own multiple smartphones. So, the assessment question seemed to be ferreting out if the purchaser (my daughter) was an existing iOS user or new to iOS. She was a previous Android user, now new to iOS. I also purchased her a new Series Watch 5 to give her the full experience that comes with owning the two devices. Next up, as Kirk DeBernardi reminds us in his posts, is for me to purchase her the new Air Pods so she has the full triumvirate iOS Device experience!
@ Jerry:
I’m not sure why you addressed your response to me. Are you saying that you agree that Mr. Chatterjee’s estimates are conservative?
Are you saying that you agree that Mr. Chatterjee’s estimates are conservative?
I agree that they are conservative (examples follow). All data sourced via estimize.com.
FQ1/18
WS revenue estimate: $86.750 Billion
Actual revenue: $88.293 Billion
FQ2/18
WS revenue estimate: $60.991 Billion
Actual revenue: $61.137 Billion
FQ3/18
WS revenue estimate: $52.368 Billion
Actual revenue: $53.265 Billion
FQ4/18
WS revenue estimate: $61.492 Billion
Actual revenue: $62.900 Billion
FQ1/19
WS revenue estimate: $84.071 Billion
Actual revenue: $84.310 Billion
FQ2/19
WS revenue estimate: $57.554 Billion
Actual revenue: $58.015 Billion
FQ3/19
WS revenue estimate: $53.314 Billion
Actual revenue: $53.809 Billion
FQ4/19
WS revenue estimate: $62.725 Billion
Actual revenue: $64.040 Billion
Average WS margin of error 1.266% understatement.
Average Gregg Thurman margin of error 0.595% overstatement.
My FQ1/20 revenue estimate $90.733 Billion.