Apple ramping up iPhone 11 assembly, cutting iPhone 11 Max orders

Posted:
in General Discussion edited December 2019
The iPhone 11 and iPhone 11 Pro will sell 70 million units before the end of the year and Apple is tweaking manufacturing volumes to accommodate specific demands, according to a historically bearish analyst.

The iPhone 11 boasts stronger sales than previous model


The iPhone 11 is believed to have sold upwards of 12 million units since its September launch. This marks a 15 percent improvement over the previously released iPhone XR. Due to the strong sales, Jun Zhang of Rosenblatt Securities predicts that Apple will increase production of the iPhone 11 by about 1.6 million units.

Conversely, Zhang believes that the iPhone 11 Pro and iPhone 11 Pro Max sales are down 15 percent compared to the sales of the iPhone XS and iPhone XS Max.

Due to the weaker sales, Zhang guesses that the iPhone 11 Pro Max production will be cut by roughly two million units.

Predictions show that there shouldn't be any significant changes in component orders. Zhang believes the initial iPhone shortage was due to production capacity issues rather than parts shortage.

Zhang also estimates iPhone total production volumes to drop year-over-year in the first and second quarter of 2020, but it isn't clear what he's basing his assumptions on. In Thursday's note he assumes the volume of the "iPhone SE 2" will be somewhat smaller, with a production of three million units per quarter starting in 2020.

The three million per quarter production estimate is not close to the iPhone SE sales volume after the first two launch quarters, where it is believed that Apple sold about 20 million in total across the launch period. The production numbers predicted by Zhang are closer to the steady-state of iPhone SE sales when the iPhone 7 launched, and until Apple discontinued the model.

There is no good way to compare the 2019 iPhone sales with the 2018 levels, like Zhang is attempting to do. This is the first year that Apple announced and released three models of iPhone at the same time.

Zhang's notes are well known for presenting one of the most pessimistic views of Apple out of major analysts, with repetitions on the theme for the last several years. The notes written by Zhang have included various pronouncements about iPhone production levels being down or delayed. Notably, Zhang was among the analysts to completely botch predictions surrounding iPhone X demand, and he holds little regard for Apple's growing Services revenue.

A graph showing the closing price of AAPL over time compared against Rosenblatt's price target (via Rosenblatt)
A graph showing the closing price of AAPL over time compared against Rosenblatt's price target (via Rosenblatt)


Price targets from Rosenblatt set by Zhang and the rest of the analyst team typically trend below the share price of Apple itself, with the current $150 price target unchanged since its installation at the end of January, down from the prior $165. At publication time, Apple stock was valued at $244.79 in pre-market trading.

Comments

  • Reply 1 of 9
    avon b7avon b7 Posts: 5,740member
    A quick reading would indicate that perhaps improvements in key areas to the hardware and readjusting the price of the XR replacement (iPhone 11) have been two important differences with regards to last year. Keeping the Max at a very high price point would also seem to support the idea that a fair amount of people will shy away from it. 

    Well, from this assessment of the market anyway and not forgetting that some people are simply holding off for a 5G phone which might also come with a major shell redesign.
    edited October 2019 muthuk_vanalingam
  • Reply 2 of 9
    wood1208wood1208 Posts: 2,506member
    iPhone 11 all around nice phone that made many people to switch from android and iphone users to upgrade.
  • Reply 3 of 9
    uraharaurahara Posts: 527member
    avon b7 said:
    A quick reading would indicate that perhaps improvements in key areas to the hardware and readjusting the price of the XR replacement (iPhone 11) have been two important differences with regards to last year. Keeping the Max at a very high price point would also seem to support the idea that a fair amount of people will shy away from it. 

    Well, from this assessment of the market anyway and not forgetting that some people are simply holding off for a 5G phone which might also come with a major shell redesign.
    Tour comment sounds smart at first. 
    There will be always at least one device at the very high price point (relative to all others). Not to forget that there are always people waiting for the next release because of multiple various reasons. 
  • Reply 4 of 9
    avon b7avon b7 Posts: 5,740member
    urahara said:
    avon b7 said:
    A quick reading would indicate that perhaps improvements in key areas to the hardware and readjusting the price of the XR replacement (iPhone 11) have been two important differences with regards to last year. Keeping the Max at a very high price point would also seem to support the idea that a fair amount of people will shy away from it. 

    Well, from this assessment of the market anyway and not forgetting that some people are simply holding off for a 5G phone which might also come with a major shell redesign.
    Tour comment sounds smart at first. 
    There will be always at least one device at the very high price point (relative to all others). Not to forget that there are always people waiting for the next release because of multiple various reasons. 
    Yes, I have no issue with Apple pricing a model so high (there are Androids that cost far more) as long as there are other models that can be popular and keep the engines turning over.

    This year there are two standout points on pricing: the iPhone 11 adjustment and and iPhone XR price drop. If the rumoured SE drops at $399 early next year it would be the icing on the pricing cake.
    muthuk_vanalingam
  • Reply 5 of 9
    lkrupplkrupp Posts: 9,109member
    avon b7 said:
    A quick reading would indicate that perhaps improvements in key areas to the hardware and readjusting the price of the XR replacement (iPhone 11) have been two important differences with regards to last year. Keeping the Max at a very high price point would also seem to support the idea that a fair amount of people will shy away from it. 

    Well, from this assessment of the market anyway and not forgetting that some people are simply holding off for a 5G phone which might also come with a major shell redesign.
    And just who says this guy is correct in his reporting? Why would you base your response on the assumption this is in fact true? Confirmation bias?
    edited October 2019 gilly33tmayAppleExposed
  • Reply 6 of 9
    avon b7avon b7 Posts: 5,740member
    lkrupp said:
    avon b7 said:
    A quick reading would indicate that perhaps improvements in key areas to the hardware and readjusting the price of the XR replacement (iPhone 11) have been two important differences with regards to last year. Keeping the Max at a very high price point would also seem to support the idea that a fair amount of people will shy away from it. 

    Well, from this assessment of the market anyway and not forgetting that some people are simply holding off for a 5G phone which might also come with a major shell redesign.
    And just who says this guy is correct in his reporting? Why would you base your response on the assumption this is in fact true? Confirmation bias?
    Why do you think I said 'would', 'perhaps', 'seem'?

    Not to mention this:

    "Well, from this assessment of the market anyway"
    muthuk_vanalingam
  • Reply 7 of 9
    The fact that the 11 is cheaper than the XR was (with no reduction in hardware/features) and Apple is still pushing trade ins hard tells us the company knows consumers are becoming price sensitive as the phones get more expensive.
    muthuk_vanalingam
  • Reply 8 of 9
    AppleExposedAppleExposed Posts: 1,805unconfirmed, member
    Anyone sense cocky undertones whenever an analyst speaks? Or is it just me? I think besides the fact they're wrong every year this is why we don't like them.

    And why is he comparing the iPhone 11 to XR and iPhone 11 Pro to XS when iPhone 11 is literally the next iteration iPhone and iPhone Pro is a new category?
    avon b7 said:
    A quick reading would indicate that perhaps improvements in key areas to the hardware and readjusting the price of the XR replacement (iPhone 11) have been two important differences with regards to last year. Keeping the Max at a very high price point would also seem to support the idea that a fair amount of people will shy away from it. 

    Well, from this assessment of the market anyway and not forgetting that some people are simply holding off for a 5G phone which might also come with a major shell redesign.

    Oh yeah, millions of people are holding off for that.........

    The fact that the 11 is cheaper than the XR was (with no reduction in hardware/features) and Apple is still pushing trade ins hard tells us the company knows consumers are becoming price sensitive as the phones get more expensive.

    Please, the Apple pricing conspiracy doesn't exist. Apple prices their products right. If iPhone 11 is cheaper it's because component pricing is down, good deals, new contracts, logistics etc. NOT because Apple was ripping us off before.
  • Reply 9 of 9
    This the same bearish Zhang that was so bearish that he originally predicted the new iPhones won’t sell well and now has to revise his “analysis”?  Is this the same Zhang that predicted a drop in Apple share price only to see Apple share price hit an all time high due to great iPhone 11 sales?  He must have a crystal ball then...
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