KGI: iPhone 7 demand has peaked, suppliers to revise down forecasts

Posted:
in iPhone
Though Apple is still showing shipment delays on iPhone 7 Plus orders -- and Jet Black iPhone 7 units -- noted KGI analyst Ming-Chi Kuo infers early buzz around Apple's latest flagship smartphone is flagging, and as such believes overall shipments have peaked.




In a note to investors obtained by AppleInsider, Kuo backs up his peak iPhone shipment prediction by pointing to immediate availability in many global markets. In particular, the 4.7-inch iPhone 7, which accounts for a bulk of Apple's annual iPhone sales, is for the most part in stock around the world.

Reiterating sentiment from a report earlier this month, Kuo says Apple is seeing lower than expected demand due to a lack of "spec surprises" in the 4.7-inch model. Further, improved delivery estimates for 5.5-inch iPhone 7 Plus units, which quickly sold out after the phone's September launch, suggests slowing demand.

Kuo said he expects iPhone suppliers to revise down shipment forecasts by 5 percent to 15 percent in November to December. The analyst updates his overall iPhone component shipment timeline to 80-85 million units in the fourth quarter of 2016, down from a previous estimate of 85-90 million units.

The analyst also cut shipment forecasts for iPhone 7 component shipments in 2016 to 90-95 million units, down from 95-100 million units. Kuo's end-shipment forecast is unchanged from September at 70-75 million units.

The estimates are in contrast to reports from Asian parts suppliers who noted a dramatic increase in iPhone component orders near the end of September. At the time, supply chain resources estimated Apple to produce 80-84 million iPhones before the end of 2016.

The final iPhone tally remains up in the air largely due to Samsung's Galaxy Note 7 recall, an event that left component suppliers scrambling. In late October, Apple was said to be increasing production of iPhone 7 and 7 Plus orders to take advantage of the snafu. What part those orders play in supply chain estimates, if any, is at this point unclear.

Comments

  • Reply 1 of 13
    "Kuo backs up his peak iPhone shipment prediction by pointing to immediate availability in many global markets" That's not supporting evidence. It can point to any number of factors - the most obvious being that Apple is keeping supply high in anticipation of the Christmas shopping season.
    mike1retrogustostanthemanSpamSandwichalbegarcpscooter63caliaustriacusjony0lolliver
  • Reply 2 of 13
    The user and all related content has been deleted.
    edited November 2016
  • Reply 3 of 13

    Great! Brace yourself for another wave of "peak iPhone" reports!

    edited November 2016 calilolliverwatto_cobra
  • Reply 4 of 13
    jfc1138jfc1138 Posts: 3,090member
    He was grossly off UP this past summer. On numbers he's not a great source. 
    irelandSpamSandwichpscooter63austriacusnolamacguylolliver
  • Reply 5 of 13
    It hasn't peaked, people are holding off in case they get one gifted to them in Christmas. Also there's people who haven't finished their current contracts so they can't just jump in and get it any time.
    watto_cobra
  • Reply 6 of 13
    So what if it's peaked? The 7 and 7 Plus will likely be relatively flat in terms of sales vs the 6. The 8 will return to growth, likely followed by a decline again for the 8s. It's a mature market product. Why debate this ad naseum everytime an analyst makes such a claim?

    The iPhone is great effing product and Apple will make another 7 or 8 billion net even with flat sales. When did THAT become a bad thing? Just continue to make the best products. Focus on the customers, not the shareholders please Tim.

    edited November 2016 williamlondonaustriacusbaconstanglolliverwatto_cobra
  • Reply 7 of 13
    I'm sick of this guy.
    mike1retrogustoSpamSandwichpscooter63calijony0lolliverwatto_cobra
  • Reply 8 of 13
    mike1mike1 Posts: 2,562member
    So, if iPhones are not in stock it's bad because customers can't buy one right away and if they are in stock it's bad because customers can get one immediately.
    williamlondonretrogustoalbegarcpscooter63austriacuslolliverwatto_cobra
  • Reply 9 of 13
    I believe KGI's forecast. I think it is right because Apple is essentially killing the Apple Store.

    The products are not in stock. There is no reason ever to go into an Apple Store just to look. The best Apple advertising and sale promotional device is to encourage people (not customers, yet!) to walk in to an Apple store on a lark -- while the wife is looking at shoes, or looking for a little special something at Victoria's Secret or the kids are antsy. 

    But, no product, no reason to walk in to look. 

    Apple is losing it big time. There's too much constipation at Apple at the top. Too much concern with margins or channel inventory or stock price?

    Apple -- stock your damn stores!
    automaticftp1
  • Reply 10 of 13
    simply258 said:
    It hasn't peaked, people are holding off in case they get one gifted to them in Christmas. Also there's people who haven't finished their current contracts so they can't just jump in and get it any time.
    I agree, I think most peiople are waiting to get Black Friday deals and maybe a good deal in the holiday season.

    calipropodwatto_cobra
  • Reply 11 of 13
    Proves how much easier it is to manufacture information than products.
    nolamacguylolliverwatto_cobra
  • Reply 12 of 13
    sog35 said:
    I sick of this a-hole.

    If Tim Cook had any kind of spine he would immediately send some muscle to visit Kuo.

    Just send 10 private contractors to give Kuo a 'visit' at his home. 

    Nothing illegal, but this guy really needs to 'feel' Apple's eye on him.

    Apple has to face dirty competition day in and day out. Wall Street hedge fund manipulators, tech media with agenda's, Kuo, and communist. Its time for Tim Cook to play dirty too. I've been saying this for YEARS. And its only getting worse since Tim Cook does NOTHING.

    You stop a bully by fighting back. Its time for Tim Cook to fight back. If he does not want to, then he needs to be replaced with a CEO who will defend the brand.
    I doubt there's anything Apple can do about a dude like this. He's entitled to an opinion and if it's a negative opinion, then what can be done. It would be rather foolish for potential investors to listen to only him in making a decision on whether they should hold Apple or not. If Kuo was that brilliant he should should have already made himself a pile of loot and retired.  I doubt he sees the future that well.  In general, most of the news about Apple is terrible compared to the other major tech companies and FANG.

    Over the last year or so Apple is performing the worst of all the major tech stocks, so maybe there's something definitely wrong with the company. Apple and Cook had been warned a long time ago about its overly heavy dependency upon the iPhone and I think it's bit Apple shareholders in the butt. There's probably no point in Tim Cook crying about how Apple is being picked on as revenue has certainly fallen whether Kuo's conclusion are right or wrong.  As an Apple shareholder I really hate the constant bad news about the company but I honestly think the company has a few weak spots.  I don't claim to be any financial wizard and I may be entirely wrong.  No company is perfect.  I would just think a company that has so much cash could easily find ways to pump up revenue but that may only be my wishful thinking.

    I'm at a loss to figure out Apple's direction and I don't know where the company is headed for the future.  Maybe all the constant bad news about the company is confusing me.  I don't like the idea of how products can't be user upgraded because it ignores the whole third-party upgrade businesses.  Is Apple really that greedy it needs to corner every penny upfront from consumers?  If that's the case they could at least allow Apple-only upgrades but they're not even allowing that to happen.  It's just so weird.  Apple takes so long to upgrade all their computers and I don't understand that at all.  Apple simply doesn't operate like most consumer tech companies and it's very puzzling to me.
    edited November 2016
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