| | | Annie -
The judgement I've been forming based on the sum of reports flowing over the last 3-4 months is:
1. Apple pulled production forward for the 6s and 6s+ into CY2015 Q3 much more than it has in previous years with the latest production iteration. They wanted better supply going into Q4 than normal. "Normal" had been 4-6 week delays between order and delivery. It makes business sense that they would want to manage supply better and I believe they did.
It caused very good quarters for suppliers on a y/y basis in Q3 and is causing not great y/y results in Q4 for suppliers. It is NOT reflecting a deterioration of the iPhone franchise.
2. Because CY Q1 always follows CY Q4 and Q4 always is Apple's best sales quarter, Apple always/almost always cuts production in Q4 relative to Q3, in managing supply for a seasonally lower Q1 than Q4.
That is happening again. It is NOT reflecting a deterioration of the iPhone franchise.
3. iPhone 6s/6s+ sales are not as robust as 6/6+ were, for an easily explainable reason.
The 6/6+ sales were helped by pent up demand for a larger iPhone form factor. That logically is leading to a very difficult compare but, it is critically essential to understand what that signifies.
It signifies that last year, when they reported 55.8% y/y unit growth in iPhone sales, that was an extraordinary above-mean result. It was not Apple's mean expected annual unit sales growth result. Because it was so far above-mean - for easily explainable reasons - this year the results are seriously impacted in comparison. Understanding that allows a reasonable assessment that Apple continues to have an extraordinary iPhone business that can continue to grow a $multi-100+ billion/year revenue segment by double digit percent at its mean.
It isn't that 6s/6s+ sales are not robust from an absolute sales perspective, it is rather that "mean" looks like "below mean" when "above mean" is the compare. 6/6+ sales were incontrovertibly, especially "above mean." It is NOT reflecting a deterioration of the iPhone franchise.
2015 was an extraordinary above-mean result. That is why it irks me to no end when I hear talking heads say "2015 was a lackluster year for Apple" and that it suggests Apple is in decline. Apple had an extraordinary year in 2015.
4. The 6/6+ is continuing to take sales from the 6s6s+. We know from Tim Cook and from other data shown here that Apple is taking share from Android at greater than historical rates. Common sense suggests that migration to the iPhone flows as follows. Feature phone user buys cheaper Android smartphone as first smartphone before migrating up to higher quality. I think the migration from Android likely favors the 6/6+ this year over the 6s/6s+ because of the cost difference and the Android switchers' generalized demographics.
It is NOT reflecting a deterioration of the iPhone franchise.
The upshot is that unit sales will reach Cook's suggested 8-11% sales increase, adjusted for currency. I'm not sure what it will mean for ASP. I suspect it will not change meaningfully because of a net increase in sales of the + relative to the 4.7" form factor and a greater demand for higher storage capacity over time. |
|
