“Maybank’s Warren Lau this morning weighs in with a warning for companies serving the Apple supply chain, writing that the company’s sales of the iPhone may hit the lowest level since 2014 in the June quarter, missing Street expectations,” Tiernan Ray reports for Barron’s.
“Without citing sources, Lau argues that Apple probably sold 52 million to 53 million iPhones in the March quarter, its fiscal Q2, which is better than consensus of 50 million. Lau thinks sales were boosted by the recent introduction of the smaller, lower-priced ‘iPhone SE’ last month, whose production is now ramping, offsetting what he views as declining production of the iPhone 6s series,” Ray reports. “However, more at issue is fiscal Q3, the June quarter, when Lau thinks shipments may drop another leg down, based on his observation of cuts in Apple’s parts orders.”
We reported that iPhone production was adjusted down 20% on 21 Mar (titled: 1Q update and 2Q outlook). We think the mix could worsen as production for existing 6S models may fall 20-30% sequentially, amid the sluggish demand. This is already on the back of a 50% QoQ cut in C1Q. We now model iPhone shipment to be 35-40m units, down >20% YoY and against Street’s expectations of mid-to-high 40m units. This could be the lowest since 3Q14.The higher mix of 6/SE models could pose risk to iPhone’s blended ASP and profit margin. The 6/SE are selling at USD100/200 lower than the flagship 6S, which continues to experience lackluster demand. We forecast iPhone unit shipment to decline 15% in 2016. — Maybank analyst Warren Lau
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MacDailyNews Take: Who from where says what?
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Even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary, I mean there is just an inordinate long list of things that would make any single data point not a great proxy for what’s going on. Apple CEO Tim Cook, January 23, 2013