Gene Munster: Apple demand high, supply tight for holidays

“If you want to give the gift of an iPad, you’ve missed the online window and need to head to a store.”

From a note to Loup Ventures subscribers that landed on my desktop Wednesday:

It’s little surprise that heading into Black Friday we found demand for Apple’s products outpacing supply. More notably, a snapshot shows the gap between demand and supply is slightly wider than what we would have anticipated given company commentary on the September earnings call. In the end, what’s most important is demand for both Apple’s newest and previous generation products is strong, and to the extent the December quarter is negatively impacted from greater than expected supply chain bottlenecks, the March quarter will have a corresponding positive impact.

    • Typical lead times for new Apple products going into Black Friday are on average about 10 days.
    • Apple’s guidance calling for an $8B supply chain headwind in December would imply lead times entering Black Friday should be an average of 16 days.
    • Today, Apple is quoting an average of 20 days for seven new Apple product SKUs in 6 countries.
    • New iPads are in the tightest supply, with new model leads times averaging 40 days. iPad accounts for about 9% of the December quarter revenue.
    • iPhones 13 are running with an average delivery time of 9 days. iPhone accounts for just under 60% of the December quarter revenue.
    • The new Watch is running with an average delivery time of 24 days. Watch accounts for just over 5% of the December quarter revenue.
    • Average lead times for previous generation products were 8 days, compared to typical same-day availability.

My takeaway: Whatever doesn’t get sold this quarter will be sold the next.

Another Munster’s shopping tip:

If you want to give the gift of a Watch, you’ll likely have to purchase it before the end of November.

5 Comments

  1. Robert Paul Leitao said:
    I’m tracking estimated delivery dates. I’m pleasantly surprised with all the concerns about supply constraints, wait times on iPhones are better than expected. Those interested in an Apple Watch should order now. For the holidays, please enjoy time with family and friends. No matter the wait times, the items will arrive. It’s not the gifts that make the holidays special. We’ve learned over the better part of two years objects can be easily replaced. Shared time with loved ones is exquisite, so very special. It’s the gift of time with our loved ones that truly makes the holidays and it’s shared time together that is something we just can’t easily replace.

    7
    November 24, 2021
  2. Brent Maynard said:
    I ordered AirPod Pros for my wife as a Christmas present today, estimated delivery Dec 17-21.

    2
    November 24, 2021
  3. Bart Yee said:
    I was at Costco the other day and decided to check out the electronics kiosks where they sell Apple and non-Apple (Samsung, HP notebooks, cheap Chromebooks) products. The non-Apple area still has the cardboard card inventory – buy & pick card and this being before Black Friday, fully loaded with inventory and cards.

    When I went to check the Apple Watch, iPads, MacBooks and Apple TV area, there were no cardboard cards or even slots for them. Instead, per Costco employee, Apple themselves gave and installed an electronic inventory supply and ordering device at the kiosk to give the ordering customer stock, availability and likely wait time if out of stock. A nice innovation and real help for the holiday rush.

    Inquiring further, the employee said that while chromebooks still outsell Macs mostly on basis of price, the iPads outsell Android Galaxy tablets about 10-20:1 despite the price differential, and Apple Watch about 7-10:1. AppleTV 4K 64GB was sold out, and AirPods and AirPods Pro were selling briskly. I’m confident that companion AppleCare+ contracts follow a majority of purchases. iPhone sales are handled separately by a carriers kiosk and online purchases are unknown to me.

    I’ll check Sam’s Club later this week.

    3
    November 24, 2021
  4. Jeff Galanti said:
    I remain convinced that Apple is going to satisfy way more of this demand than most expect. This perceived scarcity has a massive benefit of people rushing in for fear of missing out and Apple has an interest in that perception sticking around. Their supply chain mastery and piles of cash will have them in a better position than any other supplier of almost anything this holiday season. I am sure they won’t be able to meet all demand, primarily because it is so high, but I feel comfortable saying that Luca’s and Tim’s references to supply headwinds had some sandbagging in them.

    5
    November 24, 2021
  5. Kirk DeBernardi said:
    “Whatever doesn’t get sold this quarter will be sold the next.”

    Speaking as the regular Apple customer that I am, I have never had the lack of immediate availability of an Apple product defer me to another’s product.

    Never — and I know I’m not alone on this. Their products are simply worthy of the wait.

    2
    November 26, 2021

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