Early reports of low fall 2018 iPhone orders under attack from other sources

Posted:
in AAPL Investors edited June 2018
Also citing supply chain sources, a noted analyst who was correct about iPhone X demand has chimed in regarding order quantities of the late 2018 iPhone lineup.




Following the Nikkei report, Katy Huberty from Morgan Stanley delved deeper into the situation. Huberty believes that investor tumult over the Nikkei report suggesting that there would be a decrease is "understandable at face value" but "overblown."

Huberty notes that the 100 million iPhones ordered in the second half of 2017 was 89 million devices, not the 100 million that Nikkei suggested. She is expecting to see 90 million devices ordered -- a small increase from 2017, not a 20 percent decrease.

The three iPhone models currently speculated to arrive this fall include two models with OLED screens measuring 6.5 inches and 5.8 inches, while a third is equipped with a 6.1-inch TFT LCD. Most sources now claim that all three will have the TrueDepth camera array and use Face ID, but the LCD model will be singled out as a cost-effective model while the OLED versions will have more premium pricing and specifications.

Two report sources claim that, in order to avoid any manufacturing delays that allegedly occurred during the initial production of the iPhone X, suppliers were informed by Apple to prepare for the two OLED models earlier than "normal" in 2018. Increased preparation ahead of production could fend off component shortages and quality control issues that were said to have caused last year's manufacturing problems.

There is some speculation that the LCD model will be delayed, due to production yield issues surrounding its touchscreen functionality, but the situation is apparently improving. Bottlenecks in integrating the TrueDepth camera array into the LCD screen are also said to be easing, removing another hurdle that could cause manufacturing delays.

Foxconn will continue to be the main iPhone assembler this year, with it said to handle all 5.8-inch OLED units and 80 to 90 percent of the 6.5-inch OLED version, as well as 30 percent of LCD model orders. Pegatron is identified as taking 60 percent of the LCD orders and between 10 and 15 percent of the 6.5-inch OLED model orders, while Wistron makes up the remainder.

Apple CEO Tim Cook has previously spoken out about such reporting and supply chain analysis, advising for industry observers to avoid relying too heavily on these types of rumors. "The supply chain is very complex, and we obviously have multiple sources for things," Cook advised in 2013, adding that some reports could be based on a "single data point," and basing assumptions on limited quantities of data is not recommended.

Reports in January claimed Apple had cut its iPhone X production, citing slower-than-expected holiday sales" among other claims. On February 1, Apple revealed it had continued to improve its holiday quarter revenue year-on-year, and though overall iPhone sales had dropped, it had reduced by only 1.2 percent year-on-year while simultaneously achieving the highest average selling price of $796.42.

Comments

  • Reply 1 of 11
    badmonkbadmonk Posts: 975member
    Hard to believe these rumors as the iPhone 6 supercycle population replace their devices.  Could these rumors be coming about because there are three discrete models and not two like other years? and more older models still in production?

    looks like another opportunity to profit from the mistakes of the professionals IMHO.
    watto_cobra
  • Reply 2 of 11
    Cesar Battistini MazieroCesar Battistini Maziero Posts: 189unconfirmed, member
    I'm an iPhone 6 owner, and depending on what magic iOS 12 does to my device, I'll just get the money I would use for a new phone, and buy an Apple Watch and AirPods.

    I feel like the iPhone experience is much more complete with those two itens.

    So I guess Apple as always, has nothing to worry about!

    fruitstandninjajeffharrisgregg thurmanracerhomie3watto_cobra
  • Reply 3 of 11
    radarthekatradarthekat Posts: 3,350moderator
    “...it had reduced by only 1.2 percent year-on-year”

    Why is that data point not accompanied by the associated caveat that this year’s December quarter had one less week?  Ugh.
    Cesar Battistini Mazierowatto_cobra
  • Reply 4 of 11
    78Bandit78Bandit Posts: 238member
    I'm somehow reminded of the comparisons between Q1 sales in FY 2017 and 2018.  Everyone was crowing about how much sales had increased in Q1/17 without mentioning it had an extra week.  Adjusting for the extra week Q1/17 sales were actually down from Q1/16.  Then when sales fell in Q1/18 suddenly everyone had to start pointing out the 13 week quarter vs. the 14 week previous one.

    Now we have this analyst saying "come on, despite all the hype of the supercycle and Tim's spin that the iPhone X and iPhone 8 were the 'best selling devices every week since they went on sale' it turns out that last half actually was worse than expected.  We would like for you to ignore that fact now and instead focus on how much we expect actual results next time compare to the reduced results from last time.  Pay no attention to that guy behind the curtain."

    Analysts can spin a story any way they want to meet their own biases.
    gregg thurman
  • Reply 5 of 11
    vukasikavukasika Posts: 94member
    I guess my response is “what 2018 fall iPhones” ? Until something actually gets announces this is all vaporware & spectulation.  I personally suspect Apple is gonna pull the same BS is did last year, and not release the higher end phones until November becuase they are running behind schedule on producting again.  I’ve still got my 7plus & until I see something worth buying at a reasonable price point, I’m not upgrading. 
  • Reply 6 of 11
    Cesar Battistini MazieroCesar Battistini Maziero Posts: 189unconfirmed, member
    “...it had reduced by only 1.2 percent year-on-year”

    Why is that data point not accompanied by the associated caveat that this year’s December quarter had one less week?  Ugh.
    Because it's convenient for the haters

    watto_cobra
  • Reply 7 of 11
    frantisekfrantisek Posts: 733member
    And Globe is still spinning.
    watto_cobra
  • Reply 8 of 11
    One day, someday, people will figure out that sales are seasonal, chart that seasonality (like I have done) and realize that these dire predictions are nothing more than seasonal changes, and nothing to get excited about. 
  • Reply 9 of 11
    Mike WuertheleMike Wuerthele Posts: 6,161administrator
    One day, someday, people will figure out that sales are seasonal, chart that seasonality (like I have done) and realize that these dire predictions are nothing more than seasonal changes, and nothing to get excited about. 
    You're aware that Huberty's predictions are year-ago quarter, not quarter versus previous quarter, right?
    edited June 2018
  • Reply 10 of 11
    StrangeDaysStrangeDays Posts: 11,310member
    vukasika said:
    I guess my response is “what 2018 fall iPhones” ? Until something actually gets announces this is all vaporware & spectulation.  I personally suspect Apple is gonna pull the same BS is did last year, and not release the higher end phones until November becuase they are running behind schedule on producting again.  I’ve still got my 7plus & until I see something worth buying at a reasonable price point, I’m not upgrading. 
    Worth buying and reasonable price are entirely subjective. The X was worth buying and reasonable to me. And to the many others who made it the best-selling iphone. 
    watto_cobra
  • Reply 11 of 11
    anomeanome Posts: 1,443member

    I suppose at least now is a reasonable time to start speculation on the new iPhone, as opposed to a week after the release of the previous one.

    It's also interesting that the speculation about reduced orders, delays, etc is pretty much what we get every year about the iPhone. "Because last year didn't go so well, they're reducing orders for this year." and "They're having difficulty getting the features ready, and might have to hold off the release until April." (Yes, April is a bit extreme, but at least one person read that and panicked before realising it was hyperbole.)

    Then we have the other analyst, looking at the same data, and saying that the speculation of reduced orders and delays are overblown. I suppose if you average them out, you might get that things will go pretty much the same as every year. They will release a new phone, they will sell them faster than they can ship them for a few weeks, and then we'll settle down into arguing over whether it was the best year for iPhone sales ever, or the worst year ever (and Apple is D00M3D!1!, yada yada).

    watto_cobra
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