Apple's U-shaped recovery: Take that, Debby Wu

apple recovery debby wuFrom Debby Wu, Takashi Mochizuki and Giles Turner’s “Apple Tells Suppliers IPhone Demand Has Slowed as Holidays Near” posted last Wednesday:

Apple Inc., suffering from a global supply crunch, is now confronting a different problem: slowing demand. The company has told its component suppliers that demand for the iPhone 13 lineup has weakened, people familiar with the matter said, signaling that some consumers have decided against trying to get the hard-to-find item.

My take: I assume someone made money in the interim.

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  1. Robert Paul Leitao said:
    The challenge for reporters isn’t that Apple clarified order volume with its suppliers, it’s how they interpret the news. Order clarification doesn’t necessarily mean order reduction. Why do we have to go through this every year? We know how the story ends. The Grinch left Whoville transformed. Have they never read the book?

    December 6, 2021
    • David Emery said:
      You’re making an erroneous assumption here. You’re presuming these people care about the -truth-, when all they care about is the -clicks-.

      December 6, 2021
  2. Tommo_UK said:
    Another “Wong Way Wu.”

    Her namesake, Shaw Wu once wondered if increasing iPod sales would ruin Apple’s margins (circa 2005) and also called time on the Mac (circa 2006, just as the Mac when Intel Inside), earning him the monicker “Wong Way Wu.”

    Nice to see the tradition sticking with the family name.

    December 6, 2021
  3. Michael Goldfeder said:
    This conjured story is reminiscent of the Hyundai story last year that they were in discussions with Apple about signing a contract to manufacture the Apple Car.

    Lots of money was made by that bogus story when Hyundai stock jumped up quickly only to fall a few days later. However, IIRC, an investigation was launched by Korean securities authorities into that scam story that was released.

    December 6, 2021
  4. Kenny Kruger said:
    Feels like some Big Dogs have been adding AAPL the last few weeks. Hopefully Buffet is adding to his huge position!

    December 6, 2021
  5. bas flik said:
    i did a little research in my shop for average apple purchase prices in euros

    year 2020: 692 euro
    year 2021: 757 euro
    price increase 9,4%

    introduction iphone 12:
    sept: 822
    okt: 784
    nov: 789
    dec: 794
    average: 790 euro

    introduction iphone 13:
    sept: 904
    okt: 842
    nov: 828
    dec: 829
    average iphone 13: 852 euro
    average iphone 12 for the same period: 775 euro

    interesting is that iphone 12 price almost did not come down.
    from 790 to 775
    only 15 euro price drop in one year time.
    increasing prices and marketshare = pricing power

    December 6, 2021
    • Fred Stein said:
      Nice to see the detail.

      We need a new index ‘discretionary consumer products price index’. That the price increases for desirable products like even a sit-down burger or cuppa joe or iPhone or fresh cracked crab at WMF or a new car. By that metric iPhone pricing is just keeping pace. That’s great. That allows Apple to keep growing without taking a larger % of the discretionary spend of its customers – that’s us the fortunate ones.

      December 6, 2021
    • Bart Yee said:
      From @bas, translating to USD $ using current value USD:Euro

      introduction iphone 13:
      sept: 904 ($1018 USD)
      okt: 842 ($948)
      nov: 828 ($932)
      dec: 829 ($934)
      average iphone 13: 852 euro ($960)
      average iphone 12 for the same period: 775 euro ($873)

      We cannot assume US UK and China sales and price averages to be a similar mix to Europe or Bas’ numbers. However, his data does validate my sense and other reports that iPhone Pro and Pro Max sales are dominant and have pushed iPhone average sales prices higher, for sure over the $925 level.

      December 7, 2021
  6. Bart Yee said:
    If we assume some supply chain issues are subsiding, and Apple iPhone supply catches up with demand, let’s say Apple sells 82M iPhone units this quarter, 2.5% higher than the suspected low of 80M.

    Q1 2020 iPhone revenue $65.6B comp

    Estimated 82M units sold Q1 2022
    ASP of $850 = $69.7B +6.4% YoY
    ASP of $875 = $71.7B 9.4%
    ASP of $900 = $73.8B 12.5%
    ASP of $925 = $75.85B 15.6%
    ASP of $950 = $77.9B 18.75%
    ASP of $960 = $78.72B 20.0% (I like Bas’ numbers above already!)

    Here’s a moonshot estimate:
    If we assume 82M units, not including the SE 2020:

    iPhone 11-12 11% 9.02M x ASP $600 = $5.41B
    iPhone 13 mini 6% 4.92M x ASP $780 = $3.84B
    iPhone 13 22% 18.04M x ASP $880 = $15.88B
    iPhone 13 Pro 30% 24.6M x ASP $1100 = $27.06B
    iPhone 13 Pro Max 31% 25.42M x $1200 = $30.50B

    Total Revenue = $82.69B, ASP of $1008, 26.05% growth

    So between $75B-78B would be a nice consensus range to work in, $73B on the low end, $82B on the high end depending on ASP mix. Of course, if Apple is able to sell more than 82M units, well, now we’re talking. But some would say the above is plenty, save some demand for Q2.

    December 7, 2021

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