“Taiwan’s Apple supply chain manufacturers soared, with the TAIEX Index closing 2.6% higher after media reports that Apple is asking its suppliers to prepare for much higher-than-expected iPhone 7 production for 2016,” Shuli Ren reports for Barron’s.
“Taiwan’s Economic Daily said Apple had asked its suppliers to produce 72 to 78 million new iPhones by the end of the year, the highest production target in about two years,” Ren reports. “The street had expected only 65 million iPhone 7s to be produced this year.”
Read more in the full article here.
MacDailyNews Take: AAPL should enjoy a bit of a pop from this news.
The sales drop reported at the end of last quarter was, for most careful Apple observers, expected, for obvious reasons. iPhone 6 has been a significant outlier, delivering the first ‘phablet’ from Apple to a very hungry audience. In other words, that quarter’s growth (Mar-2015) wasn’t organic; it was unrealistically high because it was fulfilling the need that hadn’t been addressed for several prior quarters. March 2016 quarter has simply returned to the organic growth curve; if you plot it against all prior March quarters (except 2015), you’ll see continued steady growth.
Unfortunately, this was lost on virtually all analysts and observers, and the across-the-board YoY drop was, and continues to be, interpreted as the historic peak of the iPhone, from which Apple has now other direction but down. As we all know, and are now seeing it confirmed (by this article), that is not true.
The biggest problem with all this is that, over the past month, this has been the accepted factual narrative. Apple’s best days are behind, it is declining on all fronts, and we are now seeing the makings of the new BlackBerry (or Palm, or Nokia). What makes it worse is that the narrative won’t get a serious challenge until at least October (when Apple will likely boast with early sales numbers for iPhone 7). And if the industry operates under the assumption that Apple is doomed, then it may end up turning, at least partially, into a self-fulfilling prophecy. Developers may be rethinking their strategy of iOS-first, especially since the overall market share continues to dwindle (thanks to poor countries coming online with smartphones, and for those, the only affordable option is a $100 Android device). If the narrative remains strong, ordinary population will begin losing faith in the brand (Apple is declining, it is losing its cool, innovation is gone, HTC/LG/Huawei/Xiaomi is the new ‘it’…).
Ignorant and irresponsible analysts are doing real damage to the market. Let us hope the damage will be repaired by the massive, record-breaking sales numbers from the next iteration of the iPhone.
The narrative has lost some of its power recently. Tim Cook has single-handedly given AAPL a boost, beating back the whiplash from last quarter’s decline, giving wall street something new to think about. As for developers, they more than most understand the interior metrics of market share and won’t suddenly pivot from what they’re working on.
Apple could plan to build more for the introduction. It looks good when it sells out quickly, for about a day. However turning away customers is never good for the long run. The new push into India could be a reason from the large order. It’s has focused of new markets every few years. Started off with North America and Europe; than Japan; recently China, and now India. A third factor could be Apple starting to see the IBM deal paying off. The enterprise market is slow to change. A lot of companies are needing to replace their old Blackberrys. I’m sure a few were hoping Microsoft would create the new business phone with Nokia. That has not happened. IBM has plunged the holes Apple has had with enterprise. All three can come into play. If the 7 sales jump significantly it will be great to see the Apple haters squirming.
Excellent post. It has answered some of the doubts I had because of Apple management and product missteps, which everybody constantly repeats. Then the question becomes will enterprise and new markets be enough to thwart the anger and boycotts from the base if Apple releases the 6ss?
Every good iPhone sales peak is going to be followed by a sales valley as far as Wall Street is concerned. Apple needs to smooth out those peaks and valleys. There’s no way Apple can keep depending on those iPhone sales peaks because they’re not going to come often enough. Wall Street sees it as feast or famine and they really stomp on Apple shareholders during the famine. So far, this recent famine is lasting almost a full year. I acknowledge that it’s a famine created by cowardly investors and crooked manipulators but it still looks like a famine all the same.
I’m just hoping Apple can come up with some business that will somewhat fill those deep valleys. I’m not worried as long as Apple keeps buying back shares but it’s really annoying listening to those big investor worrywarts with their doom and gloom scenarios six months out of every year.
To be fair maybe a lot of those guys got burned with their Sony, IBM, Motorolla, BlackBerry, Nokia, etc. picks. I remember one guy a few years pounding the table on CNBC proclaiming Apple was the next RCA.
What these people often miss is that Apple is an ecosystem/lifestyle play. It’s not just a one product company, which does only one or two specific things. The iPhone does many different things, which appeals to many different people. It is a game playing device for some, for others it’s a news alert tool, some use it to record their lives, and others use it as a social interaction tool. This is not a Sony Walkman or a cellphone. The iPhone is a part of life just like breathing or eating. One of the reasons why it is so successful is because It does all of these things with few issues.
Now, there might be a day when a product comes along that is so compelling, that is so loved that it usurps the iPhone, but I don’t see that anytime in the near future. Legions of Apple fans aren’t going to switch lifestyles because a competitor has minimal bezels on their smartphone.
Here is one possible future device that could upend the iPhone’s reign. The trick is how will they make this device stylish and unique enough for the brand conscious user. Remember, Google Glass failed because it made the wearer look like a freak. I’m betting Apple’s solution will be as compelling as the iPhone, iPad, etc.
Note: what is seen (the amount of information) in the view will probably be editable on an Apple device. I would except the Google or Facebook versions to include many more ads since those platforms make their income from selling advertising/information about the user:
You people are delusional. If that number of hoped-for-sales is accurate then either Cook has lost his mind or will capitulate to China and India’s demands.
The 2017 iPhone and it’s rumored changes in design might have been worthy of such a gamble, but Apple’s contempt for its ‘customers’ with their incremental upgrades is finally catching up with it.
Cook sucks…in more ways than one….