“As more and more Street observers wring their hands over what they conjecture could be a short-fall in Apple’s March-quarter iPhone sales — Deutsche Bank today said you should give up on the fantasy of a ‘super cycle’ — some are distancing themselves from the expectation of big iPhone numbers,” Tiernan Ray reports for Barron’s.
“In this form of analyst jujitsu,” Ray reports, “Guggenheim analyst Robert Cihra this evening reiterates a Buy rating on Apple, and a $215 price target, writing that the ‘supply chain negativity looks like a buying opportunity to us,’ and that ‘singular new iPhone X SKU’ is ‘starting a MULTI-year upgrade cycle (e.g., to OLED screens, 3D sensing/Face ID using on-device ML, AR) and NOT some big 1-year ‘super-cycle.””
We have repeatedly laid out that we do NOT see Apple’s new iPhone X setting up some one-year ‘super-cycle’ but rather that it represents a new high-end SKU with NEW TECHNOLOGIES that can drive an elongated MULTI-year upgrade cycle as OLED, 3D cameras, on-device ML, and augmented reality/ AR features waterfall into mainstream models over the coming 1-3 years. Ultimately, we continue to think that is an even better scenario for AAPL stock since a 1-year jump would have driven fears of a subsequent cliff, whereas we are currently estimating that after iPhone units grow +6%Y/Y in CY18E they can grow another +4%Y/Y in CY19E. — Guggenheim
Read more in the full article here.
MacDailyNews Take: It’s an extended super cycle as iPhone moves to OLED and, likely, thin-bezel Full Active LCD and drops antiquated times like the Home button and fingerprint readers, increasing ASPs and enticing upgrades.
Some iPhone upgraders were naturally skittish about iPhone X which is packed with new tech and lacks familiar items like the Home button and Touch ID. iPhone X has proven itself and passed all tests with flying colors while earning rave reviews. As people see next-gen iPhones using the TrueDepth Camera system, Face ID and dropping the Home button, the upgrade cycle will span years.
Furthermore, those of us with iPhone X units already hate the Home buttons on our iPads and cannot wait for Apple to release next-gen iPads that operate like iPhone X, so expect a nice round of iPad upgrades coming Apple’s way, too!
Piper Jaffray: Apple stock will move higher in ‘super-long cycle’ – January 3, 2018
Ming-Chi Kuo: Apple’s real iPhone supercycle will be in 2018 – December 13, 2017
Piper Jaffray: Apple’s delayed ‘super-long cycle’ will be all the better – November 30, 2017
Apple’s second, post-iPhone X super cycle – October 26, 2017
Analyst: Apple’s iPhone supercycle morphs into a ‘super-long’ iPhone cycle – October 23, 2017
Ming-Chi Kuo: Apple’s true iPhone ‘supercycle’ coming in 2018 – October 6, 2017
This Apple iPhone ‘supercycle’ could have staying power: Apple may enjoy two consecutive successful iPhone cycles – August 8, 2017
[Thanks to MacDailyNews Readers “Dan K.” and “Brawndo Drinker” for the heads up.]