Gene Munster is encouraged by iPhone 14 demand signs

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

While connecting lead times to demand is more of an art than a science, we've found that an expansion or compression of delivery times over the years have been a leading indicator of demand. Three days into the iPhone 14 cycle, we looked at average lead times in eight countries for the base iPhone 14, Pro and Pro Max models and found an average lead time of 3.1 weeks. This is a longer average than we observed in 2021 and 2020 (measured as 2.0 weeks) as well as the cycles of 2018 and 2019 (measured as 2.5 weeks).

The 3.1-week average is the highest since the 5.5-week average in Fall 2017 preceding iPhone revenue growth of +18% in FY18. The following year, we observed iPhone lead times compress to 2.5 weeks which kicked off a year where iPhone revenue declined by -14%. This suggests that the change in lead time is more important than actual weeks of lead time. It's worth noting that some of that decline in FY19 was attributed to timing of initial iPhone shipments. Adjusting for this timing dynamic, we believe that iPhone revenue would have been down slightly in FY19 compared to the +18% growth in FY18.

The chart [above] outlines the average iPhone lead time for iPhone 14, Pro and Pro Max models three days after launch.

My take: I found Munster's second chart, below, a little harder to make sense of. One thing it shows is that in some countries -- like Canada -- wait times for the Watch Ultra are even longer than for the iPhone Pro Max.

apple munster iphone 14 lead times

10 Comments

  1. Michael Goldfeder said:
    Presuming Apple has the supply chains back in working order, then the only logical conclusion is: Insatiable consumer demand. But we should all wait until Gurman, Toni S., and Rod Hall weigh in with their stellar opinions.

    9
    September 20, 2022
    • Fred Stein said:
      Upvoted. Haha re Gurman, Toni, Rod.

      2
      September 20, 2022
      • Michael Goldfeder said:
        @Fred: Thanks for the upvote. I appreciate your comments over the years, and thank you and everyone else on Apple 3.0 for your knowledge, experiences, and expertise with Apple the company and its stock. It has been invaluable to me as an investor!

        8
        September 20, 2022
  2. Fred Stein said:
    Apple pulled in the announcement a week and did not raise prices. That speaks volumes.

    They knew they had the supply chain to meet high demand at reasonable cost. No one else comes close, especially these days. Not phones, cars, home appliances……

    But wait, there’s more… The A16 chip is the first 4 nm processor in a SmartPhone.

    They tweaked model mix in real time because they have all the components lined up.

    6
    September 20, 2022
    • Steven Philips said:
      Volume is always good!

      1
      September 20, 2022
  3. Gregg Thurman said:
    Long lines at Apple stores? I thought those days were supposed to be gone…

    At the Spokane Store the only people getting a phone are those that opted for Store delivery. Even so there has been a line of 50 – 70 people when the doors open. Twice now I’ve been advised to order online and hope for the best.

    3
    September 20, 2022
  4. Jerry Doyle said:
    “…. One thing it shows is that in some countries — like Canada — wait times for the Watch Ultra are even longer than for the iPhone Pro Max.” …. PED

    Well, if I am reading Gene’s chart correctly, then it also looks as if the wait times for the Watch Ultra also is longer in the USA than for the iPhone Pro Max. I wrote earlier this morning a comment that we may be pleasantly surprise to find the Watch Ultra a sleeper product embraced enthusiastically by many more consumers than anyone imagine. My earlier comment is below:

    “…. The Ultra may surprise us as a ‘sleeper’ product that will become in consumer demand. The sports enthusiasts will want and need the Ultra to fulfill their physical demands & goals. The rest who purchase the Ultra will want (and perhaps need) the aspirational attraction of being grouped with the adventurous elite…..The Ultra is one fine device. I may purchase one, but I want to examine it first. I prefer the classy ‘look’ of the stainless versions more than the larger triathlete Ultra. Apple may have compelled me to go with both the Ultra and Stainless Steel. I wonder how many others may be relegated down this ambivalent path….. In summary, I believe the Apple Watch Ultra edition will surprise us by its consumer embrace, same as the iPhone 14 Pros.”

    6
    September 20, 2022
  5. Charles Keller said:
    I hope this doesn’t sound bad, but I’ve been in rural Italy, very checked out. What have the lines been like. Are they uniformly long or exist around US? Globally? I just don’t know.

    1
    September 21, 2022

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