gregg thurman

melgross said:

as a result, people who planned to upgrade the year after, on their normal two year cycle, decided instead to upgrade a year earlier, and the upsurge in sales occurred.

but what happened next year with the S series? Well, a lot of upgraders for these phones already upgraded the year earlier, and so weren't available for the next year. So sales declined.

An examination of iPhone ASPs shows that during FY2016 (iPhone 6S/6S Plus) Apple sold more iPhone 6 units than it did iPhone 6S units.

Ergo, the base of 6/6S iPhones will be at least 2 years old come October 2017, but importantly, with well over half (2/3s?) being 3 years old technologically.

Average December quarter bi-annual upgrade rate of the last 4 years (5S/C, 6/Plus, 6S/Plus, 7/Plus)) is ~36"%".  Applying that rate to FQ1/2016 unit sales (74,772,000) yields FQ1/2018 unit sales of  101 Million units.

I believe Apple is going to announce an iPhone 7S (4.7"), an iPhone 7S Plus (5.5") AND an iPhone "X"*. (OLED 5.0") that will be offered at $969 with 128 GB memory.  Although this price may limit iPhone "X" sales it will raise iPhone ASPs significantly nevertheless.

I also believe the iPhone "X" will only be available during FY2018 as a special iPhone, that will be replaced by an iPhone 8/Plus in FY2019.  By discontinuing the iPhone "X" Apple makes room for a $769 iPhone 8 (64 GB 5.0" OLED) and an $869 iPhone 8 Plus (64 GB 5.8" OLED) in FY2018.

Without the iPhone "X" I do not see iPhone unit sales growing by the implied 36% bi-annual rate.  With an iPhone "X" I see that growth rate as very doable.

 95 million OLED iPhones during FY2018.  That's quite possible, but not with a $4.3 Billion mike1 said:0

"In February a South Korean report claimed that Apple had entered into a $4.3 billion contract with Samsung for 60 million OLED panels. It could be that Apple has decided to increase numbers as part of a more optimistic forecast."

If that's true, Apple's cost per panel is roughly $72. How does that compare to an LCD panel?

Prior tear downs put the LCD screen at about $9.xx each.  Since then analysts have stated that OLEDs will cost about $10.xx more than LCDs.

In my opinion these quantity "reports" were compiled by someone who didn't think to do the math before creating their junk.  That this latest "report" is based on "research" done by Nikkei reinforces my belief its junk being reported/spread by the blogosphere as fact.  It is not.

Apple, like all quantity buyers, purchase for annualized production runs with scheduled delivery.  These agreements include order increase/decrease parameters at the same price points with price increases when the base order is increased/decreased by more than the agreed upon parameters.  Increasing from 70 million to 95 million (35%) without an increase in unit cost is a fairy tale.

If the quantity is correct, then the report is implying (at most) 95 million OLED iPhones during FY2018.  That's quite possible, but not with a purchase contract of $4.3 Billion.

The issue that made CR successful no longer exists.

From 1932 until 1940 consumer demeanor demand could not be satisfied.  The Depression destroyed consumer buying power resulting in factory closures.  From 1941 through 1945 (WWII) consumer demand exploded but nothing consumer was being produced (war effort).  It took about 2 years to convert our wartime economy to a peace time economy.  From then on US manufacturers could not satisfy all that pent up consumer demand.  The larger retailers employed in-house repair facilities TO REPAIR BRAND NEW PRODUCTS BEFORE PUTTIMG THEM ON THE FLOOR.

US manufacturing quality was dismal.  This was overlooked by consumers having no other options (European and Japanese manufacturing were still recovering from WWII).