From a note to clients by analyst Samik Chatterjee that landed on my desktop Sunday evening:
We find lead times for the 12 mini and 12 tracking lower than prior weeks at 8 and 5 days, while lead times for the 12 Pro have been stable at 24 days and the 12 Pro Max has expanded to 25 days. Two broad takeaways for investors include: 1) high-end models are doing better than expected, likely driven by early 5G adopters; 2) lead times are expanding in US and are high in China, but moderating in Europe, revealing that enthusiasm around 5G remains low in countries without significant 5G infrastructure.
Maintains Overweight rating and $150 price target.
My take: This report seems to contradict several findings in his last note. (See: Carriers say Apple’s iPhone 12 is selling better than the Pro. As I say. the problem with lead time equations is that they have two unknowns — one is supply and the other demand.
Lots of folks have been hanging on to their older iPhones for several years, and right now the mobile carriers are offering some tremendous discounts for those individuals to upgrade into 5G models. To me, that’s a much better barometer of the success of this 5G launch by Apple. We’ll know for certain at the end of January, 2021 when the actual sales numbers for the quarter are reported.
I think you’ve brought up an interesting point. The surge in interest in the iPhone 12 series, due in part to 5G connectivity, may be expanding the consumer universe of early adopters. The carrier promotions, no doubt, are adding to demand.
One difference this year is the aggressive carrier promotions pretty much across-the-board and carriers are interested in locking in consumer contracts, especially post-paid consumer contracts. Additionally, impulse buyers will buy what’s in stock and currently the iPhone 12 (versus the iPhone 12 Pro, iPhone Pro 12 Max and the mini) are readily available for immediate purchase.
I’ve also read that more than 90% of all teenagers want an iPhone as opposed to any other brand. So now one can factor into the equation multiple teenagers having to be at home and learning remotely. I cannot fathom how many parents will want to keep that generation of “kids” even happier now that everyone is under the same roof together for more hours each day than ever before during this pandemic.
Who wants a cranky kid around them 24/7 when a transcendent iPhone will make them more tolerable to be around. Maybe even toss in an iPad or Mac for good measure and make the Best Parent List for 2020 and 2021.
Many more will take today’s subsidized price and immediate delivery before paying a higher price and waiting nearly a month for delivery.
Only those absolutely desirous of the Pro’s camera will pay the higher price and accept longer delivery times.
Seems to me the iPhone 12 w/o 5G still would be a worthy upgrade (like in India and much of S. America.) 5G features make the iPhone 12 series a bit future proof for those thinking ahead. I think US carriers decided, especially with the pandemic affecting usage and sales upward, pushing the iPhone 12 would be the grand slam they needed to get users to pay more for 5G plans, available or not.