KGI: iPhone 7 demand has peaked, suppliers to revise down forecasts
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.
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
Great! Brace yourself for another wave of "peak iPhone" reports!
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.
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!
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.