J.P. Morgan: Early adopter demand for Apple’s iPhone 12 Pro Max dissipates

Especially in China. Meanwhile, lead times for the 12 Pro still rule.

From a note to clients by analyst Samik Chatterjee that landed on my desktop Sunday:

Closing out another week, we find the lead times for the 12 Pro continue to build, implying favorable adoption across broad consumer demographics. However, while 12 Pro demand continues to hold strong, the lead times for the 12 Pro Max moderated (primarily in China), likely led by the dissipation of demand from the early adopters, and implying that the 12 Pro will likely be the SKU with most staying power till the next launch. Separately, while lead times for the 12 mini and 12 increased modestly this week, they are well below the lead times for 12 Pro and 12 Pro Max.

Maintains Overweight rating and $150 price target. 

Cue figs. 1 and 2 (click to enlarge):

My take: I bought the Pro ’cause it was smaller.

12 Comments

  1. Michael Goldfeder said:
    IMO, the Magic “8” Ball or Ouija Board is a far better indicator of the demand.

    4
    December 13, 2020
    • Gregg Thurman said:
      And far more entertaining.

      1
      December 13, 2020
  2. Fred Stein said:
    Proposed headline: Demand for Apple’s iPhone 12 Pro remains unabated.

    The Max is a rock star, but it is really big. I’d love to see a gender breakdown of Max buyers.

    0
    December 13, 2020
  3. Gregg Thurman said:
    These don’t even count as ‘statistics’, because at best they’re an indirect sample with a questionable correlation

    Wild speculation based on incomplete data, IOW, a SWAG (scientific wild ass guess).

    0
    December 13, 2020
  4. Robert Paul Leitao said:
    In my view, there’s nothing alarming in this note. The iPhone 12 Pro Max will remain supply constrained into the March quarter. The model is coming off its first month of availability and production capacity likely increased over the past four weeks. The iPhone 12 Pro is likely to be the unit sales leader for the product line.

    2
    December 13, 2020
  5. Steven Philips said:
    Joe: There’s nothing wrong with statistics. They’re a very valuable part of math and science.
    (UNLESS – they’re in the hands of liars and damn liars! – or idiots!)

    0
    December 13, 2020
  6. Chris Ferebee said:
    Catchy headline, but the important point IMO is not the differential between Pro and Pro Max. Rather, it’s that demand for the Pro line is strong, apparently above Apple’s expectations at least at launch, which bodes well for margins.

    1
    December 14, 2020
  7. Bart Yee said:
    The equilibrium tug between size vs. cost in the Pro line will always favor the Pro over the Max. Apple’s tiered pricing at this upper premium and Ultra premium price range differentiates this. The Max will appeal to those who want / need the largest, most capable and can afford it. The Pro will set a sweet spot for those seeking the higher end in a more manageable size. The regular iPhone 12 is for the “value” conscious and the mini is tailored for those seeking a small form factor without giving up performance and most features.

    Also playing upon the various sales percentages is the relative speed and breadth of economic recovery in countries iPhones sell in. My sense is the Max will see slower but steady demand until pandemic related obstacles resolve. Apple does not depend on the Max but IMO, Max sales will still be way more than the Samsung Note 20 / Fold 2 / Flip combined, all of which are priced at or higher than the Max models.

    IMO, Apple has no need to reach Max supply equilibrium anytime soon because Apple knows there is relatively small defection rates from iOS to Android than there is Android to iOS. And like bas has mentioned, having too much supply in inventory Is not what Apple wants, it will manage supply to demand.

    0
    December 14, 2020

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