iPhone 15 Pro Max demand outselling supply, says Goldman Sachs

AppleInsider

Shipping dates show that the iPhone 15 Pro Max is the best-selling iPhone 15 model worldwide, and is now backordered into November 2023.

iPhone 15 Pro Max

Within minutes of pre-orders starting, the iPhone 15 Pro Max was backordered, and it now won't deliver before mid-November. Wedbush has already reported that the iPhone 15 range is selling better than the iPhone 14, and now Goldman Sachs concurs.

Basing its report on an analysis of shipping times, rather than any manufacturing or supply sources, the company is concluding that demand is strong. "Although we recognize that there are caveats to extrapolating delivery lead times to consumer demand," says Goldman Sachs in a note to investors seen by AppleInsider, "we're encouraged by what appears to be strong demand, particularly against the backdrop of heightened competition from Huawei [in China]."

The chief and substantial caveat is that Apple has not released details of how many iPhones it has manufactured, and it never reveals how its figures break down by model. Consequently, it is entirely possible that, for instance, Apple made fewer of the pink iPhone 15 than other colors and that this is why it is sold out.

Nonetheless, Goldman Sachs has been tracking estimated shipping times worldwide and seen that "by region, mainland China is experiencing some of the longest lead times across Pro and Pro Max."

Curiously, Goldman Sachs says the iPhone 15 Plus is seeing lead times of around two weeks in China, suggesting that it may be more successful than the iPhone 14 Plus.

"The iPhone 15 Pro and Pro Max are seeing the longest lead times across all regions," continues Goldman Sachs, "while the iPhone 15 and iPhone 15 Plus are generally seeing more normal lead times, with the exception of the iPhone 15 Plus in pink which is seeing lead times of 4 weeks in the US."

While agreeing with Wedbush that sales appear strong, Goldman Sachs does not agree that the available carrier discounts are "eye-popping."

"Separately, we're encouraged by US carrier promotions available for the iPhone 15 family of devices," it says, "which appear largely consistent with year-ago and provide opportunities for consumers to cover the full purchase price of a new phone with an eligible trade-in."

Goldman Sachs does note that "the most attractive promotions require consumers to have - or upgrade to - some of the carrier's newer, more expensive plans."

Prior to the launch of the iPhone 15 range, Goldman Sachs was predicting that sales would be strong because of demand within its "growing iPhone installed base that serves as the foundation for growing monetization per user."


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M68000

AppleInsider said:

[...]

It could be true,  but it seems like the production run for the 4 models would need to be equal to base that on? Or i’m missing something ? But Apple does not release such information? It seems the regular 15 looks like a really nice phone too.

Moderated Edit: 
Please try not to quote the entire article : ) 

mikethemartian

Isn’t scarcity by design?

retrogusto

mikethemartian said:

Isn’t scarcity by design?

Probably not in this case. Apple wants to sell as many phones as possible, as soon as possible. The sooner the customer gets their new phone, the sooner they’ll be ready to replace it again, and the less likely they will buy something different because they can’t wait. Presumably the best margins are on the most expensive phones, so even if prospective Pro Max buyers just get a different iPhone because they can’t wait for the Pro Max, it will still mean lower revenues and lower profits for Apple. Also, they want to entice switchers away from Android, to get them into the Apple Services ecosystem ASAP. Scarcity can work for a company like Ferrari, certain clothing companies, etc., but in Apple’s case, given their significant market share, the likelihood of winning business by convincing people that they’re joining a highly rarified group is outweighed by other factors. 

Marvin

mikethemartian said:

Isn’t scarcity by design?

Not the way it's often suggested as a marketing ploy. They always have huge demand in the lead up to Christmas and they can't scale operations up permanently or they'd be excessive in quieter periods so it inevitably creates constraints. Plus they have mentioned in the past that they can correct product defects in early models if they are caught quickly enough.

The peak in the lead up to the holiday season just after launch is nearly 2x every other period.

This is up to around 90 million units in a quarter. Foxconn has over 500,000 employees and the following says they can assemble 500k iPhones per day:

https://www.knowyourmobile.com/news/how-many-iphones-does-apple-make-a-day/

To cover 90 million units, that's 180 days (6 months) to cover the last quarter of the year. This requires a 3 month lead time on manufacturing and then running 24/7 up until the holidays. They'd need to hire hundreds of thousands more employees to improve the supply constraint but then they aren't needed later on.

The system they have now works just fine. People usually only have to wait a few weeks.

kmarei

"demand outselling supply" could also mean they made 1000 units and they sold out in minutes
without numbers, this means absolutely nothing

FileMakerFeller

kmarei said:

"demand outselling supply" could also mean they made 1000 units and they sold out in minutes
without numbers, this means absolutely nothing

But as @Marvin so ably demonstrated, we can infer from previous history that they're producing tens of millions of devices per quarter. Apple's been doing this for more than a decade; I think we can give them the benefit of the doubt that they're making these devices as fast as they can and are still unable to meet demand.