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.