Apple - Adding and Subtracting
The Apple rumor mill is always in motion, but recent stories that Apple is reducing production volumes for the iPhone line by 20% from last year’s plans, has caused concern and weakness in companies that are part of the iPhone supply chain. Disappointment with the iPhone Mini, which we have mentioned previously, seems to be the root of these stories, with estimates of iPhone Mini volume cuts as high as 70% still circulating. We expect that while Apple might have pulled back 1H expectations for iPhone sales a bit, much of those cuts would be focused on Mini production reductions, as we believe the iPhone 12 and 12 Pro are seeing strong relative sales.
Smartphone suppliers we have spoken with have been seeing a mixed bag, with some having visibility through June, and others noting a slowdown from 4Q ‘20’s pace. Since a number of these suppliers feed both Apple and other smartphone brands it is hard to isolate the effect of the weak iPhone Mini from Huawei issues or new models from Samsung and others. That said, we do expect smartphone shipments to be up in 1Q on a q/q basis, but visibility through June is still hard to come by. 5G components should continue to see growth but a number of components and component materials have seen price increases over the last few months and while that would affect new models that are just building inventory more than existing models, we expect smartphone profitability will continue to be under pressure this year.
Smartphone suppliers we have spoken with have been seeing a mixed bag, with some having visibility through June, and others noting a slowdown from 4Q ‘20’s pace. Since a number of these suppliers feed both Apple and other smartphone brands it is hard to isolate the effect of the weak iPhone Mini from Huawei issues or new models from Samsung and others. That said, we do expect smartphone shipments to be up in 1Q on a q/q basis, but visibility through June is still hard to come by. 5G components should continue to see growth but a number of components and component materials have seen price increases over the last few months and while that would affect new models that are just building inventory more than existing models, we expect smartphone profitability will continue to be under pressure this year.
RSS Feed