Bill Maurer for Seeking Alpha:
Last week I discussed how technology giant Apple was looking for a reason to see shares hit a new all-time high. The stock is threatening to take out its old high as optimism over the iPhone 11 line has combined with enthusiasm over newly-launched services… I discussed some analysts being positive in my previous article, but it was a Nikkei report late last week that production for the 11 line was by up to 10%. Shares jumped nearly 3% on the news Friday, eliminating a good chunk of the losses seen in last week’s market rout.
management did a much better job this year of providing more value to the consumer. The lower price of the iPhone 11 as compared to last year’s XR launch plus the free year of TV+ should be positive for demand. However, there are a few other factors to examine in this case, so let’s see why else production may have increased.
Last year, the company kept four legacy phones available for consumers at various price points, but this year only three remained. Perhaps if the XS and XS Max were still available, the 11 line might not have sold as well. Also remember that last year the iPhone XR launched over a month after the other two phones, as opposed to three phones all at once this year. The timing of the launch cycle could have impacted production a little. It’s also possible that we’re seeing more upgrades than normal and that consumers aren’t as enthusiastic about buying the older, outdated models.
Another thing to think about is something I heard discussed on CNBC TV last Friday. Could Apple have decided to increase production in an effort to get more phones into the US before the potential round of tariffs hits on Dec. 15?
MacDailyNews Take: Apple certainly could be stocking up ahead of potential U.S. import tariffs, but consumers could also be more enthusiastic about the new iPhones, given the lower starting price for the iPhone 11 vs. the XR, the increased durability and battery life, and the significantly improved camera systems. Both possibilities – stocking up in the U.S. and increased demand – can coexist.