Evercore: So much for those Apple production cuts

Don’t worry about iPhone or MacBook demand, says analyst Amit Daryanani. Worry about component shortages.

From a note to clients that landed on my desktop Tuesday morning:

All You Need to Know: Apple is reportedly planning to raise iPhone production by 30% in H1:21 and by 20% for the full year (CY21) according to a news article from Nikkei. Although component shortages may be an issue, Apple is forecasting up to 230M iPhones this year (vs consensus at 215M). Suppliers have noted that demand is exceeding expectations for iPhone 12 Pro and Pro Max. Demand for the iPhone 12 is in-line with expectations, while the 12 Mini is tracking slightly below initial forecasts. This is consistent with what we have seen in our delivery time tracker and it points to strong mix which should result in higher ASPs and gross margins.

The story also notes that Apple is preparing an aggressive production schedule for its MacBook line. On the Macbook line, the aggressive production targets are likely driven by a desire to work through Intel inventory as it completes its transition to the new M1 processor (something our supply chain checks have confirmed in the past as well). Component shortages remain the main risk as demand looks set to stay strong through 2021.

Net/Net: The Nikkei story is consistent with our channel checks which point to strong demand for high-end iPhone 12 models with supply as the main potential bottleneck. While supply issues may delay some iPhone shipments in Dec-qtr and even potentially Mar-qtr, this revenue would simply be delayed and we continue to expect iPhone shipments to stay STRONGER FOR LONGER.

Maintains Outperform rating and $135 target.

My take: Once again, Apple is selling ’em as fast as it can build ’em.

12 Comments

  1. Ralph McDarmont said:
    Yes Virginia, there is a Santa Claus

    5
    December 15, 2020
  2. Romeo A Esparrago Jr said:
    This news is like Christmas in summertime!

    1
    December 15, 2020
  3. Gregg Thurman said:
    A bit OT (OK a lot OT). My daughter was recently appointed Executive Director of the Museum of North Idaho. She was hired to revamp the existing museum, moving from a 4,000 sq ft facility to completing construction on a 13,000 sq ft facility and expanding memberships and services to generate $400,000 annual income in the next two years.

    Completion of the new museum (a 6,000 sq ft house built in 1903 with two new underground wings totaling 7,000 sq ft) will cost US$4,000,000.

    Since coming on board (November 1) the museum has raised over $700,000, including today’s gift of 411 shares of AAPL.

    Go AAPL. Anybody got some extra AAPL they’d like to donate to the museum? : )

    5
    December 15, 2020
    • Romeo A Esparrago Jr said:
      Whoever(s) gifted the 411 AAPL shares is generous & awesome!
      Excelsior!

      1
      December 15, 2020
    • Gregg Thurman said:
      Did I mention the museum is in Coeur d’Alene, Idaho? Beautiful place to come visit your money.

      2
      December 15, 2020
  4. bas flik said:
    apple sales in my webshop in the netherlands
    from 5 nov 2020 until today.
    on average we paid € 789 per phone

    model avg purchase price sales
    iPhone 12 Pro Max – € 1.005,53 – 26,42%
    iPhone 12 – € 734,19 – 19,75%
    iPhone 11 – € 561,97 – 17,52%
    iPhone 12 Pro – € 917,76 – 16,39%
    iPhone 12 Mini – € 676,16 – 5,81%
    iPhone 11 Pro Max – € 938,39 – 3,34%
    iPhone 11 Pro – € 798,32 – 3,22%
    iPhone SE 2020 – € 393,27 – 2,15%
    iPhone XR – € 466,69 – 1,78%
    iPhone 8 – € 445,51 – 1,52%
    iPhone 6S – € 250,00 – 0,58%
    iPhone XS Max – € 700,15 – 0,52%
    iPhone 7 – € 287,38 – 0,49%
    iPhone XS – € 641,81 – 0,40%
    iPhone X – € 655,00 – 0,06%
    iPhone 8 Plus – € 480,00 – 0,05%

    7
    December 15, 2020
    • Gregg Thurman said:
      Good stuff, thanks bas

      1
      December 15, 2020
    • Jerry Doyle said:
      @bas flik: Many thanks bas, you’re the man! Great information 🙂

      1
      December 15, 2020
  5. Fred Stein said:
    Disclaimer: I’m not a market timer nor market technician.

    But we’ve been in a pennant pattern, which investopedia says leads to a breakout or breakdown. Looks like a breakout in the works.

    3
    December 15, 2020
    • David Baraff said:
      AAPL is like a tornado. Tornados never stand still, so the rule of thumb is that as long as you see a tornado moving left or right, you’re more or less OK.

      But if it’s not apparently moving, either it’s moving directly toward you or away from you…

      I view AAPL stock the same way—when it has been standing still too long, you damn well better be prepared for something serious to happen.

      3
      December 15, 2020
      • Jerry Doyle said:
        @David Baraff: I strive to write this comment humbly, but none of this Apple stock performance surprises me as I felt all along we are going to have an extremely good Q1 & Q2 driving Apple stock price to $150 by the Q2 financial call late April 2021. Apple is hitting on all cylinders concomitantly with humongous global liquidity, record personal savings and a world populous hunkering down with their devices to work, to learn, to communicate, to enjoy entertainment, to exercise, etc. We ARE a $200 stock as brother Gene says and I say, “Laissez le bon temps rouler!”

        3
        December 15, 2020

Leave a Reply