Healthy demand suggests iPhone 12 'supercycle' is underway, analyst says

AppleInsider

The iPhone 12 and iPhone 12 Pro "supercycle" is currently underway for Apple, according to supply checks carried out by investment firm Wedbush.

Credit: Andrew O'Hara, AppleInsider

In a note to investors seen by AppleInsider, Wedbush analyst Daniel Ives says that recent Asia checks have been "incrementally bullish" around iPhone 12 demand in the U.S. and in China. Ives is currently predicting that Apple suppliers will ship 80 million iPhone 12 units in the initial launch period, with sales just less than 90 million possible, but on the outside edge of the prediction model.

Wedbush is seeing a "clear tick up" for demand around the iPhone 12 Pro models, with indications that the 6.1-inch variant is currently the "star of the show." Demand for the iPhone 12 Pro Max is also very strong, however, and Ives notes that this bodes well for Apple's average selling price (ASP) heading into 2021.

In late October, Ives anticipated 75 million units sold. Roughly eight weeks prior to Thursday's note, and prior to the iPhone 12 event, the analyst expected 65 million to 70 million units.

"We have not seen a launch uptrend such as this in a number of years for Apple and the only iPhone trajectory similar would be the iPhone 6 in 2014 based on our analysis," the analyst said.

Based on lead times on Apple's online storefront, as well as Wedbush's Asia checks, Ives believes that pre-orders for the iPhone 12 have tracked nearly double that of the iPhone 11.

In China, strong pent up demand has created healthy performance of the iPhone 12 lineup heading into the holiday season. The investment firm previously called China a "key ingredient" in the 2020 to 2021 supercycle.

"With our estimation that 350 million of 950 million iPhones worldwide are currently in the window of an upgrade opportunity, we believe this will translate into an unprecedented upgrade cycle for Apple with a major holiday season on the horizon despite the softer consumer backdrop," Ives writes.

The analyst is maintaining his $150 12-month AAPL price target, based on a sum-of-the-parts valuation on its 2021 fiscal estimates. Broken down, that's based on a 15x multiple to Services at about $900 billion and a 7.3x multiple on Apple's hardware business at $1.7 trillion.

venomxxr

90 million iPhones sold in Q1 would be the dream. Given expected revenue in other areas, we’d be looking at Q1 revenue of $115b-$120b. 

More realistically, I’m thinking it’ll fall somewhere between $105b-108b. Either way, biggest quarter ever is imminent.

CuJoYYC

80,000,000 iPhones in a quarter means about 900,000 iPhones sold per day, 37,500 per hour, 625 per minute, or more than 10 iPhones per second. Per SECOND!

Let that sink in for a minute or two. 

Imagine the global supply chain wizardry required to manufacture anything at that scale, let alone a premium, technologically advanced product family like iPhone.

Bravo Tim Cook. Bravo.

jcc

CuJoYYC said

Bravo Tim Cook. Bravo.

Bravo Chinese people, Bravo. I don’t think we can do it here in the States. People and unions are too lazy.

Rayz2016

jcc said:

CuJoYYC said

Bravo Tim Cook. Bravo.

Bravo Chinese people, Bravo. I don’t think we can do it here in the States. People and unions are too lazy.

Now you’ve done it. 

Kuyangkoh

Rayz2016 said:

jcc said:

CuJoYYC said

Bravo Tim Cook. Bravo.

Bravo Chinese people, Bravo. I don’t think we can do it here in the States. People and unions are too lazy.

Now you’ve done it. 

His got an opinion points

tech13

jcc said:

CuJoYYC said

Bravo Tim Cook. Bravo.

Bravo Chinese people, Bravo. I don’t think we can do it here in the States. People and unions are too lazy.

Chinese slave labor! I don’t think that’s anything for China to be proud of. Workers forced to live in the manufacturing plants, while working 12 hour days for $5 dollars a week. You should try that....

MplsP

I have to wonder how much 5G plays into this (assuming the numbers are accurate.) In spite of it being basically useless there are a lot of people drinking the 5G koolaid and are convinced they need it.

Beats

CuJoYYC said:

80,000,000 iPhones in a quarter means about 900,000 iPhones sold per day, 37,500 per hour, 625 per minute, or more than 10 iPhones per second. Per SECOND!

Let that sink in for a minute or two. 

Imagine the global supply chain wizardry required to manufacture anything at that scale, let alone a premium, technologically advanced product family like iPhone.

Bravo Tim Cook. Bravo.

But but 1,000+ knockoff companies are selling twice that many iPhone knockoffs a second!! Most are given away to clueless grannies!!!

Beats

tech13 said:

jcc said:

CuJoYYC said

Bravo Tim Cook. Bravo.

Bravo Chinese people, Bravo. I don’t think we can do it here in the States. People and unions are too lazy.

Chinese slave labor! I don’t think that’s anything for China to be proud of. Workers forced to live in the manufacturing plants, while working 12 hour days for $5 dollars a week. You should try that....

There's always that uninformed moron fresh from the anti-Apple echo chamber.

NO ONE in China is "forced" to work for Foxconn. Absolutely no one. As a matter of fact , most people prefer to work on iPhones than knockoffs since Apple plants treat their employees better and pay more.

Again, NO ONE is forced to work at Foxconn.

Beats

jcc said:

CuJoYYC said

Bravo Tim Cook. Bravo.

Bravo Chinese people, Bravo. I don’t think we can do it here in the States. People and unions are too lazy.

You do realize it would take the U.S. 10 years and billions of dollars to even begin to manufacture for Apple at this scale?

You act like if Americans took an energy drink we can start manufacturing iPhones next month.

cerebrix

Beats said:

jcc said:

CuJoYYC said

Bravo Tim Cook. Bravo.

Bravo Chinese people, Bravo. I don’t think we can do it here in the States. People and unions are too lazy.

You do realize it would take the U.S. 10 years and billions of dollars to even begin to manufacture for Apple at this scale?

You act like if Americans took an energy drink we can start manufacturing iPhones next month.

He's actually right.  There's a great New York Times Article from during the Obama administration that goes into how President Obama had asked Steve Jobs what it would take to move iPhone manufacturing to the United States and how he quickly, flatly got told "it will never happen".  It then goes into why that is and Foxconn basically turned the project from a multi year project, to a multi month project with literally a phone call.

Fantastic read.  The article actually won a Pulitzer

01ieconomy1-22.pdf (pulitzer.org)

jcc

Beats said:

jcc said:

CuJoYYC said

Bravo Tim Cook. Bravo.

Bravo Chinese people, Bravo. I don’t think we can do it here in the States. People and unions are too lazy.

You do realize it would take the U.S. 10 years and billions of dollars to even begin to manufacture for Apple at this scale?

You act like if Americans took an energy drink we can start manufacturing iPhones next month.

You do realize that that’s exactly my point. Unions and lazy people are the reason we’re in this situation. It’s ironic that Americans are always complaining about communism but unions are exactly why Soviet Union failed and it’s doing the same here. When people expect to be paid not for how hard or much they work but only that they draw breath, it’s a recipe for failure.

The reason the Chinese are kicking, not just our butts, but everyone else’s is because they are willing to work for the betterment of not only themselves but the country. They’re willing to work with no overtime pay if needed. Go watch that Netflix documentary by Obama on the glass manufacturer from China. See how the workers from China are willing to sacrifice for the good of the company. Not happening with the American workers - too lazy and self centered.