From a note to clients by analyst Daniel Ives that landed on my desktop early Tuesday:
It has been a roller coaster ride for investors in Apple over the past month as the euphoria of a robust December quarter/March guidance has now been thrown into a state of disarray with the coronavirus outbreak…
In our base case scenario the supply chain is able to get towards full capacity by late April/early May (anything earlier we would consider a BEST case scenario). Under this scenario the flagship 5G iPhone product launches for the Fall delays by a few weeks at most and demand across China rebounds into the June/September quarters with some contained demand destruction in China.
To this point, taking a step back while the last few weeks has been an exogenous “shock event” to Apple’s ecosystem on both the supply and demand side due to its China exposure, we believe this will be short lived as the longer term 5G super cycle thesis and services re-rating remain the crux of our bull thesis on Apple for the next 12 to 18 months.
While the fluid situation from the coronavirus tragedy has cast a dark shadow over Cupertino’s head, we believe a “perfect storm of demand” is forming for Apple looking ahead with our estimation that 350 million of the company’s 925 million iPhone customers worldwide are in a window of an upgrade opportunity.
My take: Not Ives’ most comforting metaphor.
See also: The Apple 3.0 COVID-19 archives