Wuhan: Ming-Chi Kuo cuts iPhone estimate by 10%

From MacRumors‘s “Ming-Chi Kuo Says Coronavirus Outbreak Impacting iPhone Supply, Lowers Shipment Forecast”:

Apple analyst Ming-Chi Kuo has lowered his iPhone shipment forecast by 10 percent to 36-40 million units in the first quarter of 2020, noting that the Wuhan coronavirus outbreak is affecting iPhone supply in China…

In his research note with TF International Securities, seen by MacRumors, Kuo added that smartphone shipments in the Chinese market declined by 50-60 percent year-over-year during the Chinese New Year holiday period, possibly due to declining consumer confidence in the country stemming from the coronavirus outbreak.

My take: Kuo is not always right, but he tends to have his ear to the ground.

See also: How reliable is Ming-Chi Kuo?

6 Comments

  1. David Emery said:
    It wouldn’t surprise me at all if Apple started having supply chain problems in China. More locations are extending the New Years holiday.

    But those disruptions would be temporary, once the outbreak is over. (Even Spanish Influenza ‘ran its course’.) And that would result in pent-up demand and probably a lot of overtime for the supply chain to catch up.

    2
    February 3, 2020
    • Dan Scropos said:
      Solid points. It also creates yet another fantastic opportunity to buy back $15-$20 billion in shares this quarter.

      3
      February 3, 2020
      • Alan Birnbaum said:
        Good time to deploy some of the FCF for share repurchases. Hopefully that will reduce some of the shortfall caused by the coronavirus.

        0
        February 3, 2020
  2. Thomas Larkin said:
    10% is a guess, and, that there could be some disruption in the supply chain is obvious. Ming-Chi Kuo’s strength is in predicting hardware releases. Indications are that China and Apple are both working to minimize the interruption to actual production and as noted, the likely result is pent up demand rather than lost sales. So, I suspect the midday reversal in the stock price is at least as much attributable to Tony Sacconoghi now coming out with the claim Apple is not getting the uptake on free Apple TV subscriptions, which I suspect is a rather dubious assertion at best. That claim was quickly echoed by Patrick Seitz at IBD (who always seems to be rooting for Apple’s demise, and is therefore regularly caught parroting dubious story lines), and by The Motley Fool under the headline “3 Reasons Apple TV Plus is failing.” A Forbes contributor also joined the pile on. The post earnings pile-on is in full swing, again.

    2
    February 3, 2020
    • David Emery said:
      ” Tony Sacconoghi now coming out with the claim Apple is not getting the uptake on free Apple TV subscriptions, ” How the Hell would he know that, barring a leak from someone pretty high up inside Apple??? Sounds like ‘rectal sampling’ to me.

      0
      February 3, 2020
  3. Bart Yee said:
    My take is that any supply disruption during Jan-Feb-Mar quarter simply delays an Apple product purchase rather than eliminating it entirely. Production decreases can, eventually, be compensated by production increases, particularly if a product “hits” like the rumored new SE II. Results may lag or shift a month or two, trimming the current quarter a bit (the wide guidance) and maybe bolstering the seasonally weaker fiscal Q3 2020. By then, additional info on product updates, refreshes, and new 5G products should overtake production issues. Additionally, local Indian iphone production should have ramped up and incrementally added to international sales.

    0
    February 4, 2020

Leave a Reply