Real world iPhone 6s adoption data contradicts Apple supplier channel check rumors

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  • Reply 61 of 107

    That pretty much nails it. We see $80 very soon. Every single Apple supplier is reporting weak Dec and March results. 

    "Every single Apple supplier"?  Seriously?  How many suppliers are there?  Can you tell us how many there are and how many you follow closely?
    A few years back there was a list circulating on the Internet that listed literally hundreds of then-current Apple suppliers. Which makes these supply chain rumour 'checks' an act of futility.
    delreyjones
  • Reply 62 of 107
    I can't believe the market continues to respond to these rumors, when Apple has said not to trust data points like these over the years. Not to mention, they've always proven completely false, so either financial analysts are manipulating the market to drive Apple share price down or they're just complete idiots. Crazy how so many people are expecting some big drop - like all of a sudden consumers say "gee, I don't like my iPhone, even though I used it more to buy products over the holidays - more than any other phone (not that it counts for anything).".
    Its not about holiday sales. Its about sales in March and June quarter. That is where the supply chain is showing a drop in unit sales.
    Apple makes shifts all the time, regardless of what quarter it is.  That's been Tim Cook's point.  X, Y and Z supplier could see shifts in production orders (lower qty), while A and B suppliers see increases.  What these "analysts" have been doing over the years amounts to wire fraud, but without significant changes to how we view Wall Street, it's just going to continue.  If you want to bet on where Apple is headed, the best place is to follow what Apple says, not these bozo Apple shorters.
    palomine
  • Reply 63 of 107
    "Every single Apple supplier"?  Seriously?  How many suppliers are there?  Can you tell us how many there are and how many you follow closely?
    Skyworks
    Avago
    Qorvo
    Cirrus Logic
    Invensense
    Foxconn - said to have extended holiday time off for workers
    Dialog
    Sharp
    Pegatron

    How many more do you need?

    Long term I'm still bullish on Apple. They just have too much cash, to loyal of a fanbase, to much talent, to strong an ecosystem to be in the dumps for too long. I see iPhone 7 bring unit growth back. But long term Apple needs to grow services revenue.
    In Apple's description of Supplier Responsibility, http://www.apple.com/supplier-responsibility/, it looks like there are more than 600 suppliers.  Unless someone is tracking all of them, noting how much each is going up and down compared to normal for this year, plus constantly adding new ones, then they know very little.  So to answer your question, I need about 600 more with a lot more detail on each one.
    basjhjnolamacguyanton zuykov
  • Reply 64 of 107
    nolamacguynolamacguy Posts: 4,758member
    rob53 said:
    Why do you think that? It's obvious you don't understand Apple of the people who buy Apple products. Sure, everyone would like prices to go down on everything but the majority of Apple buyers understand that they're getting value for their money. The majority of Android phones are either given away or sold very cheaply because they are cheap, contrary to what some Android phone buyers say. There will be several new generations of iPhone buyers before the next type of product is introduced. Also, what's the problem with the amount of revenue they're making right now? The majority of mobile device manufacturers and resellers are making next to nothing. Apple is the only company that makes any appreciable profit. The problem with AAPL is that there's too much manipulation going on. It's like casinos fixing every game. The house always wins and the Stock Market is the house. Apple the company is doing great and I bet really couldn't care less about the stock market.
    What's wrong with Apple's current revenue?  Nothing. As long as you are satisfied with a PE of 8. That's what companies with flat revenue are valued at. That gives you a stock price of about $85. Would you be satisified with that? Bottom line is Apple needs to grow revenue or else the stock will drop another 15-20%.
    how much revenue does Amazon need to grow to avoid THE DOOM you're predicting for Apple?
    palomine
  • Reply 65 of 107
    Philip Elmer Dewitt has a post up about why Jony Ive's salary isn't reported in SEC filings. Apple says its because he's not a section 16 officer. According to the SEC a section 16 officer is someone with "policy making" authority at the company.

    OK, Steve Jobs told Walter Isaacson that Jony had "more operational power" than anyone at the company besides Steve himself. With the New Yorker profile and 60 Minuts piece Apple certainly didn't seem to have any issues with Ive being portrayed as the most important person at the company (next to Tim Cook). Does anyone really believe he Jony has no "policy making" authority at the company? Seriously?
  • Reply 66 of 107
    nolamacguynolamacguy Posts: 4,758member
    Tim Cook and Apple really needs to change their strategy with dealing with Wall Street. Growing iPhone units alone is not good enough anymore. Being super top secret is not good enough anymore. You got to give investors something to look forward to. If Cook confirmed they were working on a car I bet the stock would have not been hit so hard.

    At this point I'm not 100% sure Tim Cook is the right CEO right now. He was the right CEO to maximize iPhone unit sales with his vast knowledge of the supply chain. But in this point in Apple's history I think its less about pushing out more units but rather growing services. They may need a new CEO who understands how to grow new services and who is an expert in M&A to put that $200 billion in cash to work. 

    Apple's biggest problem right now is its over reliance on iPhone. Until that is solved they will forever be haunted by these supply check stories. They need to grow more services or acquire companies.

    Stock is at $95 right now. Stock has lost about $50,000,000,000 in value just this week.
    I go back and forth on Cook. He probably was the right guy to be interim CEO when Steve was sick because that was mainly managing Apple operationally. And maybe he was the only one the other SVPs would report to. But I never thought he was very good at giving the world Apple's vision and when you watch a keynote you get a lot of what and how (Schiller & Ive) but very little why. And because Apple is so secretive everyone is left guessing where it might be going next. What was the point of letting CBS into Apple's design studio when all we saw were a bunch of tables draped in sheets?
    I can't remember the keynotes where Jobs unveiled their product roadmap or opened the design kimono to the press. which were those?
    fastasleep
  • Reply 67 of 107
    nolamacguynolamacguy Posts: 4,758member
    The product mix of iPhone models in Apple's real world installed base of users shows smooth adoption of iPhone 6s models 
    so sales are "quite smooth"
  • Reply 68 of 107
    jonljonl Posts: 210member
    Skyworks
    Avago
    Qorvo
    Cirrus Logic
    Invensense
    Foxconn - said to have extended holiday time off for workers
    Dialog
    Sharp
    Pegatron

    How many more do you need?

    Long term I'm still bullish on Apple. They just have too much cash, to loyal of a fanbase, to much talent, to strong an ecosystem to be in the dumps for too long. I see iPhone 7 bring unit growth back. But long term Apple needs to grow services revenue.
    In Apple's description of Supplier Responsibility, http://www.apple.com/supplier-responsibility/, it looks like there are more than 600 suppliers.  Unless someone is tracking all of them, noting how much each is going up and down compared to normal for this year, plus constantly adding new ones, then they know very little.  So to answer your question, I need about 600 more with a lot more detail on each one.
    Many of these aren't "channel checks" but companies that have warned or recently posted disappointing quarters and guidance. Today, it was Cirrus Logic and Qorvo that warned. Cirrus is the sole source for iPhone and iPad (Mac and iPod, too) codecs and has been since at least 2012, and that business still makes up something like 70% of their revenue. When they have a major shortfall, it's either Apple crushing them on ASPs (2013) or declining sales to Apple, NOT Apple shifting to another supplier. Ditto for Dialog and the power management chip in the iPhone and iPad, and that company is even more dependent on Apple. Other major suppliers like NXP have recently reported disappointing quarters and guidance. To believe Apple isn't slowing, you have to believe Apple is crushing all these companies on ASPs which IMO is not terribly plausible.

    asdasd
  • Reply 69 of 107
    I go back and forth on Cook. He probably was the right guy to be interim CEO when Steve was sick because that was mainly managing Apple operationally. And maybe he was the only one the other SVPs would report to. But I never thought he was very good at giving the world Apple's vision and when you watch a keynote you get a lot of what and how (Schiller & Ive) but very little why. And because Apple is so secretive everyone is left guessing where it might be going next. What was the point of letting CBS into Apple's design studio when all we saw were a bunch of tables draped in sheets?
    I can't remember the keynotes where Jobs unveiled their product roadmap or opened the design kimono to the press. which were those?
    I never used the phrase "product roadmap". That is not the same thing as vision. Name me the last keynote where you got a clear sense of Tim Cook's vision for the company, outside of his typical only Apple can do hardware, software, services blah blah blah. Why hasn't he done a better job of getting Wall Street to stop focusing on iPhone units and more on, say, install base and ARPU? The biggest reason the stock has lost over $200B in the last 6 months is because Wall Street is panicking over how many iPhones will Apple sell and is it more or less than the same time period from the year before. I think it's up to Tim Cook and the management team to get Wall Street thinking about the company differently, and that goes beyond telling them not to focus on supply chain noise.
    palomine
  • Reply 70 of 107
    adamcadamc Posts: 582member
    Slowing 6s sales won't show up till March and June quarter. Dec quarter iPhone 6s sales should match or beat 6 sales. All the supply chain reports are for phones sold in 2016.

    I think its time for people just to admit that iPhone units can't go up forever. We are at or very near peak iPhone. At max we have another 3-5 year of iPhone growth, unless Apple sells phones for a much lower price point.  So Apple really has only 2 choices if it wants to keep growing revenue. Either they need to lower the price of iPhones or they need to sell more services or do both.



    Slowing 6s sales won't show up till March and June quarter. Dec quarter iPhone 6s sales should match or beat 6 sales. All the supply chain reports are for phones sold in 2016.

    I think its time for people just to admit that iPhone units can't go up forever. We are at or very near peak iPhone. At max we have another 3-5 year of iPhone growth, unless Apple sells phones for a much lower price point.  So Apple really has only 2 choices if it wants to keep growing revenue. Either they need to lower the price of iPhones or they need to sell more services or do both.



    Time to write in to Tim Cook and ask for a job, you seem to know how to fix Apple supposed problems, don't let your talent go wasted....
    delreyjonesfastasleep
  • Reply 71 of 107
    so what now ? Sell after hours at 95-96 or wait and see what happens, no idea what to expect for Friday, but not feeling it but hate to sell at such a low price, was thinking sell and get them back a few dollars lower
  • Reply 72 of 107
      I think cook needs to do a $100b buyback and take advantage of this bs.  Even after dropping nearly 30% WallStreet continues to push stock lower.  The PE is already 10.  Then you have a stock like chipotle who has had numerous confirmed ecoli problems  and warned and their stock is only down 40% and  it may take 2-3 years for their earnings to recover.  Analyst are expecting apples earnings to pick back up in 2-3 quarters.  This is insane
    palomine
  • Reply 73 of 107
    jonljonl Posts: 210member
    I never used the phrase "product roadmap". That is not the same thing as vision. Name me the last keynote where you got a clear sense of Tim Cook's vision for the company, outside of his typical only Apple can do hardware, software, services blah blah blah. Why hasn't he done a better job of getting Wall Street to stop focusing on iPhone units and more on, say, install base and ARPU? The biggest reason the stock has lost over $200B in the last 6 months is because Wall Street is panicking over how many iPhones will Apple sell and is it more or less than the same time period from the year before. I think it's up to Tim Cook and the management team to get Wall Street thinking about the company differently, and that goes beyond telling them not to focus on supply chain noise.
    All he has to do is show other revenue on track to take over iPhone/iPad hardware sales... Oh wait.
  • Reply 74 of 107
    larryjwlarryjw Posts: 906member
    Let's assume both that the supply chain rumors are correct, and Apple is smart. I can suggest that Apple is preemptively slowing their channel inventory to avoid problems in the quarter. We will know on January 26 how Apple did Xmas quarter and what it expects to do in the next quarter. 
    delreyjones
  • Reply 75 of 107
    jonl said:
    Many of these aren't "channel checks" but companies that have warned or recently posted disappointing quarters and guidance. Today, it was Cirrus Logic and Qorvo that warned. Cirrus is the sole source for iPhone and iPad (Mac and iPod, too) codecs and has been since at least 2012, and that business still makes up something like 70% of their revenue. When they have a major shortfall, it's either Apple crushing them on ASPs (2013) or declining sales to Apple, NOT Apple shifting to another supplier. Ditto for Dialog and the power management chip in the iPhone and iPad, and that company is even more dependent on Apple. Other major suppliers like NXP have recently reported disappointing quarters and guidance. To believe Apple isn't slowing, you have to believe Apple is crushing all these companies on ASPs which IMO is not terribly plausible.

    I don't want to put words in your mouth, so correct me if I'm wrong, but it sounds like you're contradicting Tim Cook when he said channel checks and the like are a very poor way to predict Apple's performance.  He was either mistaken, i.e. he doesn't know his business that well, or he was being dishonest?  You make it sounds like there's such a mountain of evidence that a decline is a foregone conclusion.  Am I misinterpreting you?
  • Reply 76 of 107
    "Every single Apple supplier"?  Seriously?  How many suppliers are there?  Can you tell us how many there are and how many you follow closely?
    Skyworks
    Avago
    Qorvo
    Cirrus Logic
    Invensense
    Foxconn - said to have extended holiday time off for workers
    Dialog
    Sharp
    Pegatron

    How many more do you need?

    Long term I'm still bullish on Apple. They just have too much cash, to loyal of a fanbase, to much talent, to strong an ecosystem to be in the dumps for too long. I see iPhone 7 bring unit growth back. But long term Apple needs to grow services revenue.
    It would be nice to have a meaningful discussion regarding Cirrus Logic's results.  Their current quarter sales were up 16%. Next quarter they expect sales to be flat.   Why is this bad?   No expert on this company, so I don't know why their estimates were so high?  They also add they expect to have a meaningful increase in revenues for the year.  
  • Reply 77 of 107
    jonljonl Posts: 210member
    It would be nice to have a meaningful discussion regarding Cirrus Logic's results.  Their current quarter sales were up 16%. Next quarter they expect sales to be flat.   Why is this bad?   No expert on this company, so I don't know why their estimates were so high?  They also add they expect to have a meaningful increase in revenues for the year.  
    It is bad for a company that has been exceeding estimates and their own guidance to warn and miss. It is bad to go from +36% YoY for Q3/14-Q3/15 to +16% YoY for Q3/15-Q3/16 (the current quarter). Sequentially, it's +42% vs +25%. Revenue for FY15 was $917 million. With only one quarter left to go in FY16, they're already at $975 million, so for the CEO to say "meaningful revenue growth for FY16", well duh! As for the FY17 "strong growth" claims, they're hoping to gain content in the purported move to Lightning earpods and thus a DAC in the headphones or the cable, but that's (a) highly speculative, and (b) presumptive that Apple won't go with (say) ESS, which makes a very highly regarded pure DAC used in some other phones; I think Apple might be able to get away with a simple DAC for that application instead of a more expensive smart codec from Cirrus. It should also be noted that Cirrus has lost the amps in the entire iPad line to Maxim. It also appears Apple passed them over for the always-on Siri, despite Cirrus having a chip for that in 2013, which has been used by Motorola. Finally, Apple passed them over entirely for the Watch, where codec and amp went to Maxim, the codec decision being a real surprise given Cirrus's hyping of 55 nm for the last few years. And Apple is still using Knowles mics instead of the ones Cirrus acquired from Wolfson. These losses and failures to grow share occurred all the while the CEO was noting the "outstanding relationship" and "robust design activity" they have with their "largest customer" in shareholder newsletters.

    Cirrus does hope to expand further in Android thanks to their 2014 Wolfson purchase, but Samsung dealt them a blow by reducing guidance and returning to Snapdragon for the North American and European Galaxy 7, which likely means returning to the Qualcomm codec. Last year, Samsung went all Exynos and used Wolfson codecs across the S6 line, which was an unexpected plus for CRUS. Still, Cirrus hopes to win share in mid-level phones and with other manufacturers.

    While it's true they have lots of opportunity, they've missed out on a lot of it already, and Cirrus is not the one-stop shop for audio they are aspiring to be, at least not with Apple. And concerning what they believe for the future, they believed their LED lighting controllers were going to be a $200-$400 million business, so there's that. When that didn't pan out, they bought Wolfson and rededicated themselves to audio, but since then, they lost the amps in the iPad Mini 4 in addition to the iPad Airs, didn't get the amps in the iPad pro, didn't get always-on voice for Siri, and lost out on the Watch completely. Their revenue has increased due to Apple having a great iPhone 6 year and the Wolfson add-on revenue, but with iPhones and Samsung phones apparently about to do worse, that represents even more doubt going forward. Finally, it should be mentioned that Cirrus has become a 30% tax payer over the last year or so, whereas they had DTAs that reduced their tax burden to essentially nothing for the last several years. So there are a lot of hurdles to get them back to the $46 2012 peak.

    ETA: I forgot that Cirrus gained an amp in the iPhones 6s, going from codec+amp to codec+2 amps. It's not clear why Apple did that, but in any case, Cirrus has just warned even with this increased content.
    edited January 2016
  • Reply 78 of 107
    The product mix of iPhone models in Apple's real world installed base of users shows smooth adoption of iPhone 6s models and no evidence of a decline in demand that would require unexpected production cuts. This publicly available data severely undercuts the supply chain rumors supporting a narrative of "Peak iPhone" and reactionary order slashing.


    Source: Fiksu


    Data reported by Boston-based mobile marketing firm Fiksu, which tracks usage analytics among the most popular 50 mobile apps including Facebook and Twitter (as noted by reader Jim Neil via Twitter), shows that iPhone 6s and 6s Plus have ramped up to account for more than 13 percent of the iPhone installed base within the first 100 days since their release.

    That's less than the percentage attained by last year's iPhone 6 models at the same point (which had reached about 21 percent), but that's expected because the total installed base of iPhones this year is much greater. Over fiscal 2015, Apple sold over 231 million new iPhones, massively expanding the pool of iPhone users.

    This year Apple's newest 6s models are selling next to last year's 6 models with a similar appearance at a $100 discount. However, the bulk of iPhones sold since the launch of iPhone 6s appear to be Apple's latest and newest model, as the growing adoption ratio of 6 and 6 Plus abruptly flattened out at the launch of iPhone 6s last fall. While the older 6/6 Plus models continued to sell, the increasing size of the installed base kept those earlier models' "percentage of all users" static.


    Source: Fiksu


    Since the 6s launch, the percentage of all iPhone users with a 6/6 Plus has actually gone down slightly, indicating that the increase in new 6s buyers is enough to obscure the smaller growth in new sales of last year's phone, even as the newest 6s/6s Plus models expanded their relative share by 13 percentage points.

    There is zero indication that iPhone 6s models have tapered off or suddenly plunged; the data shows a smooth increase in sales since its launch.

    As a percentage of the installed base, the iPhone 6s adoption ramp should be expected to be less than iPhone 6, due to the much larger size of today's installed base. However, the combined adoption of the new 6s and 6s Plus are consistently higher than the level seen in iPhone 5s two years (and 400 million iPhone sales) ago.

    That indicates that as a premium priced model and a less obviously new "s" model version, the 6s family has incited more sales and switching than the earlier 5s model, which similarly competed against a $100 cheaper, previous generation of itself.

    With the years of data Apple has on upgrade rates and switcher behaviors, this fails to support the idea that Apple was forced to dramatically shift its orders in response to slack demand for its new phone and instead indicates that Apple's 6s launch has been nothing but typical, and inline with Apple's previous performance.

    On the other hand, iPhone 6 and 6s models combined have now reached about 55 percent of the iPhone installed base, essentially identical to the the proportion of users who had upgraded to either an iPhone 6 or 5s/5c model at this same point a year ago. That means that upgrade cycles have remained about the same despite the huge influx of new iPhone users, a metric that highlights the consistent cash machine tied to Apple's annual refresh cycle.

    Android has slower adoption patterns



    In stark contrast to the smooth annual upgrades among iPhone users, Fiksu's data on the Android installed base shows a much more chaotic and contentious rollout of flagship models, despite being dominated by one company. It also highlights the shrinking ratio of relevance of Samsung's primary premium flagship model among users.


    Source: Fiksu


    While the Galaxy 3 accounted for almost 19 percent of Android's installed base at the beginning of 2014 (a year and a half after it launched) in Fiksu's data, Samsung's Galaxy S4 successor only managed to grab just over 12 percent over the next year, and its Galaxy S5 hasn't yet reached 9 percent representation.

    This indicates that Samsung's sales are much less cyclical than iPhones. Android users also appear be sticking with older models for much longer (or are more likely to buy older models), as usage data shows the adoption rate of the now three and a half year old Galaxy S3 remains currently tied with the S4 and S5.

    Apple's ability to entice users to upgrade--and to choose its newest, most expensive models they do--is a primary reason why it now accounts for 94 percent of mobile industry profits.
    My quick math shows a different story: a 25% drop in calendar Q4 iPhone sales. Several analysts report an installed base of 400 million in dec14 and an estimated 500 million in dec15. Using the 21% in the article get you to 85 million, of which you need to subtract 10 million for the first weekend that falls in Q3. 13% of 500 million is 65 million minus about 10 million is 55 million. A 25% drop from 75 million in 4Q14 (which is about what was reported) to an implied 55 million for 4Q15. Please response respectfully and substantively when pointing out where my reasoning fails.
  • Reply 79 of 107
    jfc1138jfc1138 Posts: 3,090member
    And another analyst (Aaron Rakers, Stifel’s Apple analyst) calculate a 635 million iPhone installed base in Dec. 2015...,
    edited January 2016
  • Reply 80 of 107
    jfc1138 said:
    And another analyst (Aaron Rakers, Stifel’s Apple analyst) calculate a 635 million iPhone installed base in Dec. 2015...,

    Stifel has 580 actually as an estimate for 4Q15. Oppenheimer, CS, Goldman have it at 500 million and dec14 around 400 million. The latter number corresponds well with the actual sales number for 4Q14 though maybe accidentally. I've also seen some other install based estimates that were much higher--not sure why though.
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