Neil Hughes
Contrary to supply chain speculation, production of the iPhone X remains right on schedule, according to investment firm Rosenblatt Securities, which also has seen evidence that sales are accelerating in China.
Analyst Jun Zhang said there has been no evidence of further cuts to iPhone X production after the holiday season. The memo to investors issued on Tuesday is particularly noteworthy because Rosenblatt has a history of providing negative outlooks on AAPL stock.
Rather than iPhone X production cuts, Zhang believes it's possible that the Taiwanese media is confused, and is instead referring to cuts in iPhone 8 and iPhone 8 Plus production. According to Zhang, cuts for the iPhone 8 lineup began in the December quarter as production of the flagship iPhone X ramped up.
Apple has been hit by supply chain rumors claiming that iPhone X orders have been cut in the March quarter. That has led some analysts to say that the $999 starting price on the device might be too high for consumers.
But Rosenblatt believes that iPhone X component suppliers will see a flat sequential March quarter. The firm did say that overall iPhone component suppliers could see a 25 percent quarter-over-quarter decline in the spring, but such decreases would be in line with typical seasonal trends for smartphone sales.
"We believe iPhone X sales were stable in North American market throughout holiday season and has likely seen an acceleration in China's market over the last two weeks," Zhang wrote. "Our industry research with Chinese operators indicates that iPhone X sales likely surpassed 8/8Plus sales combined so far. We also note that recent estimate adjustments could be attributed to previously very bullish views on the iPhone X cycle."
Rosenblatt, meanwhile, has had conservative forecasts for the iPhone X. Its own estimates call for more than 35 million units to be built in the March quarter.
Though Rosenblatt has historically been bearish on AAPL stock, the firm did switch from a "neutral" to "buy" rating on shares of the iPhone maker in early November. Since then, it has maintained a $180 price target.
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11 Comments
Which is which? The report of iPhone X not selling well is just a mere stock manipulation, IMO. I wish I got the cash to buy AAPL on the dip.
No matter if they are pro- or anti-AAPL, the opinions they provide are solely for the benefit of their clients and their analysis business. Therefore, anything they state should be reduced with a substantial self-interest discount.
This is from TheStreet.com, hardly the most unbiased or enlightened source but I heartily agree to the comment:
"I can't help but question some of this analysis. For starters, this report comes amid thin trading around the Christmas holiday. Not that that discredits the information, but its timing is questionable. Second, how many times have we seen these overseas sources telling us misleading information on Apple's iPhone shipments? Too many to count and most just seem to be intra-quarter noise.
Another factor is the analysts. No offense to Sinolink Securities and JL Warren Capital, but we're not exactly talking about gurus like Morgan Stanley's Katy Huberty or Gene Munster, a long-term analyst formerly with Piper Jaffray.
Finally, are we really going to trim off nearly 3% of Apple's roughly $900 billion market cap -- a swing of approximately $25 billion! -- over a report from an outlet most investors have never heard of citing "unidentified supply chain officials?"
That sounds a little fishy to me. It would also be surprising if Apple's iPhone wasn't in high demand during the holidays amid a strong economic backdrop. The fact that there are millions of customers still operating an iPhone 6 or 6s also suggests that a wave of upgrades are likely."
Both Sinolink and JL Warren Capital are Chinese investment advisory firms with practically no major track record on Wall Street. And at the risk of being accused of racist, I am going to say that I am really suspicious of a research firm founded by a Chinese national doing research on Chinese firms but adopts a western sounding name as company title without any explanation from the company web page.
But how can this be? Weibo mentions were half that of the iphone 6.....! hahaha