iPhone 4S drawdown ahead of Apple's next model is smaller than expected
Suppliers are said to be less concerned about Apple's expected decrease in production of the iPhone 4S ahead of a new iPhone model, as sales of the 2011 smartphone remain strong.
Analyst Brian White with Topeka Capital Markets met with suppliers this week during a trip to the Computex trade show in Taipei, Taiwan. He said he did not sense much concern from those suppliers regarding the ramp down of iPhone 4S production ahead of a next-generation iPhone launch.
"In fact, the overall tone was a bit better than we expected and one company even seemed to be experiencing upside from this program in (the second quarter of 2012)," White wrote in a note to investors on Friday.
He has maintained his projection of 30.9 million iPhones sold in the June quarter, which would represent a sequential decline of 12 percent White's discussions with suppliers convinced him to hold on his estimate, while other analysts on Wall Street are trimming theirs.
For example, analyst Robert Cihra with Evercore Partners announced this week that he has trimmed his June quarter iPhone estimate to 28.8 million units, down from his previous prediction of 31 million. He noted that sell-through of the iPhone 4S is "solid," but he expects sell-in of the device to begin cycling down ahead of a sixth-generation refresh.
Cihra also said he has been unable to pin down whether Apple's next iPhone will launch in the month of September or October. He said he considers a September launch to be "more likely than most."
The analyst has forecast a monster, record shattering quarter for Apple in December, with the next iPhone pushing handset sales to 49 million in the three-month span. He said the potential upside is well over 50 million based on what he called "aggressive early build plans and massive demand anticipated for the adoption of LTE and new form-factor."
Analyst Brian White with Topeka Capital Markets met with suppliers this week during a trip to the Computex trade show in Taipei, Taiwan. He said he did not sense much concern from those suppliers regarding the ramp down of iPhone 4S production ahead of a next-generation iPhone launch.
"In fact, the overall tone was a bit better than we expected and one company even seemed to be experiencing upside from this program in (the second quarter of 2012)," White wrote in a note to investors on Friday.
He has maintained his projection of 30.9 million iPhones sold in the June quarter, which would represent a sequential decline of 12 percent White's discussions with suppliers convinced him to hold on his estimate, while other analysts on Wall Street are trimming theirs.
For example, analyst Robert Cihra with Evercore Partners announced this week that he has trimmed his June quarter iPhone estimate to 28.8 million units, down from his previous prediction of 31 million. He noted that sell-through of the iPhone 4S is "solid," but he expects sell-in of the device to begin cycling down ahead of a sixth-generation refresh.
Cihra also said he has been unable to pin down whether Apple's next iPhone will launch in the month of September or October. He said he considers a September launch to be "more likely than most."
The analyst has forecast a monster, record shattering quarter for Apple in December, with the next iPhone pushing handset sales to 49 million in the three-month span. He said the potential upside is well over 50 million based on what he called "aggressive early build plans and massive demand anticipated for the adoption of LTE and new form-factor."
Comments
Well, yeah. And we're over three months away from launch, so I can't imagine this has any sort of effect on it now…
bit early
And why are you posting this? You can't have any real rumors 3 or 4 months before launch.
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Originally Posted by ldigges
You can't have any real rumors 3 or 4 months before launch.
Well, we do have these new parts showing up, and two years ago we saw the iPhone 4 in a near-complete state stolen from a bar a month before launch, so it's not completely impossible. You're probably right that we can't have any real supply chain rumors an entire quarter before launch.
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Originally Posted by Tallest Skil
Well, yeah. And we're over three months away from launch, so I can't imagine this has any sort of effect on it now…
So what would you attribute to the decrease in sales from one quarter to the next?
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Originally Posted by island hermit
So what would you attribute to the decrease in sales from one quarter to the next?
Standard downward trend. Holiday quarters are always the biggest, and sales will go down as the year progresses. There's nothing to worry about unless we're outside the single-year cycle, I wouldn't imagine.
Quote:
Originally Posted by Tallest Skil
Standard downward trend. Holiday quarters are always the biggest, and sales will go down as the year progresses. There's nothing to worry about unless we're outside the single-year cycle, I wouldn't imagine.
Why would people not continue to buy the phone at a pace equal to the holiday quarter?
That's a rather lousy business model in my opinion. Letting sales lag sequentially for 3 quarters while you prepare for one crazy quarter.
Hmmmm... that sounds suspiciously like people are waiting for the next phone to come out.
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Originally Posted by island hermit
Why would people not continue to buy the phone at a pace equal to the holiday quarter?
Ask people. It's the same with any product.
Quote:
That's a rather lousy business model in my opinion. Letting sales lag sequentially for 3 quarters while you prepare for one crazy quarter.
Oh, they're not preparing for it any more than they prepare for anything else. More units always sell at holiday; that's just how it is.
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Hmmmm... that sounds suspiciously like people are waiting for the next phone to come out.
All products have a downward trend in sales as they age. Cars, electronics, upholstery… It's not some big conspiracy.
I guess you don't have any experience at all with retail. For many companies, 50% or more of their annual sales occur in the Christmas quarter and then it plummets in the next quarter. It's not a matter of 'letting sales lag for 3 quarters'. It's a matter of consumers being more willing to spend money in the Christmas quarter - so you want to be positioned to take advantage of that. If Apple simply produced and shipped the same number of units each quarter, they'd miss out on millions of sales at Christmas.
Quote:
Originally Posted by Tallest Skil
Ask people. It's the same with any product.
Oh, they're not preparing for it any more than they prepare for anything else. More units always sell at holiday; that's just how it is.
All products have a downward trend in sales as they age. Cars, electronics, upholstery… It's not some big conspiracy.
What?!
You're kidding right.
You should review iPhone sales before you say that holiday quarters are always their strongest. (hint - it sometimes depends on the quarter in which the phone is released)
As far as business models... Samsung, for instance, just brought out the S3... mid season, to prop up mid year sales. They will bring out other models of phones later in the year. Of course their holiday quarter will be better but their sales don't lag sequentially after the holiday quarter. This is why they beat iPhone sales overall as the year progresses.
[ if people weren't waiting for the next iPhone my guess is that sales might drop after the initial release (nothing to do with the holiday quarter) and then hold more or less steady from that point until the next release... but that isn't the case.]
Quote:
Originally Posted by Tallest Skil
Well, we do have these new parts showing up, and two years ago we saw the iPhone 4 in a near-complete state stolen from a bar a month before launch, so it's not completely impossible. You're probably right that we can't have any real supply chain rumors an entire quarter before launch.
Yeah, that was lost in a bar. That is a different story. Now we are talking supply line rumors. I agree with that. If we found an iPhone in a bar now, I would consider that real.
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Originally Posted by island hermit
You should review iPhone sales before you say that holiday quarters are always their strongest. (hint - it sometimes depends on the quarter in which the phone is released)
Sorry the chart's only goes to 2010. I'll try to find a newer one:
Of course, that might just make your point, so I apologize in advance if it does.
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Originally Posted by jragosta
I guess you don't have any experience at all with retail. For many companies, 50% or more of their annual sales occur in the Christmas quarter and then it plummets in the next quarter. It's not a matter of 'letting sales lag for 3 quarters'. It's a matter of consumers being more willing to spend money in the Christmas quarter - so you want to be positioned to take advantage of that. If Apple simply produced and shipped the same number of units each quarter, they'd miss out on millions of sales at Christmas.
More experience then yourself, obviously.
Check out iPhone sales since 2007. Top sales quarters are not always the holiday quarter... sometimes it depends on the release date of the phone.
Ah, here we go.
These'd be fiscal quarters, right?
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Originally Posted by Tallest Skil
Ah, here we go.
These'd be fiscal quarters, right?
This looks like fiscal quarters.... where Q1 is the holiday quarter.
Quote:
Originally Posted by island hermit
This looks like fiscal quarters.... where Q1 is the holiday quarter.
Okay. Well, apologies, then; that's pretty odd. People really seem to like the iPhone 4, eh?
Quote:
Originally Posted by Tallest Skil
Okay. Well, apologies, then; that's pretty odd. People really seem to like the iPhone 4, eh?
I've always thought that Apple could do better with a different business model... but then the iPhone 4 gave me hope that they were onto something. It appears, though, that, as competition grows stronger, Apple's sales declines throughout the remainder of the year may increase.
I'm hoping that I'm right about increased screen size/new look being the panacea to cure these ails and that sales quarters will again increase throughout the year.
Methinks that while 4s sales will taper off a bit due to the level of customer demand, overall it will remain strong despite a new model coming out. The 4s just might become one of 2 models of iPhone. Apple will probably now have 2 models (or sizes) of iPhones, like they do with MacBooks, iMacs, etc. - a 3.5" and a new 4". That will keeps sales of the 4s going for some time.
Of course Apple could repackage the 4s as a "3.5" iPhone 5" to companion the "4" iPhone 5". Along those same lines, we might soon see two models or sizes of the iPad as well. If you look at all of Apple's products, there seems to be a trend moving toward 2 'models' of everything.
Quote:
Originally Posted by Tallest Skil
Well, yeah. And we're over three months away from launch, so I can't imagine this has any sort of effect on it now…
Especially when you consider how long it took to hit every world market and there's no reason for them to assume that Apple will pick up the pace this year and slam them all out together. So even if the US supply is cut back there's still Asia etc to fill.