Speaking of Apple…
The iPhone SE is an appealing low-cost version of the iPhone 13 line that Apple has updated for the first time in 2 years. Earlier this month (3/9/22 & 3/23/22) we compared the iPhone SE (2022) to the older model and to Samsung’s (005930.KS) A23 LTE for perspective on how the SE compares with other mid-range smartphone as the iPhone is typically known as a premium brand. Since then there have been delays in pre-order shipments, which were pushed out to today or tomorrow quickly after March 19, when pre-orders began, and most recently there are indications that Apple has already cut orders at suppliers, although such cuts have yet to be officially confirmed nor has the reason why.
Speculation from some has cited slower than expected sales (or pre-orders) with high-end expectations coming down from 25m to 30m units for this year by ~10m units. Other sources have indicated that Apple is cutting orders by 20%, but in both cases the reasons seem to differ. In one case the source indicates that store checks point to weak sales while others are focused on the war in Ukraine and inflation, although technically slower sales and inflation are closely tied together. After only 9 days, during which many potential buyers might be more concerned about pump or food prices than buying new phone, it seems a bit early for Apple to start cutting orders from wherever their initial orders were weeks ago. Yes the Ukraine war has been raging for 36 days, but it took some time before the world realized that Russia was looking to take over the entire country and not just a few provinces.
All in, the world has moved into a new mode, one not seen, especially in Europe, for many years and that will set many similar estimates for CE products off balance. While we believe Apple could have already contacted suppliers about possible order reductions, things remain very fluid and with 3 quarters to go for this year, any order reductions could easily me made up later in the year if the socio-economics environment changes, and we have no absolute understanding of Apple’s real order estimates to suppliers, only those of analysts, so without a crystal ball, we expect much of the speculation over potential iPhone SE order cuts is just that, speculation and is subject to change almost daily.
Speculation from some has cited slower than expected sales (or pre-orders) with high-end expectations coming down from 25m to 30m units for this year by ~10m units. Other sources have indicated that Apple is cutting orders by 20%, but in both cases the reasons seem to differ. In one case the source indicates that store checks point to weak sales while others are focused on the war in Ukraine and inflation, although technically slower sales and inflation are closely tied together. After only 9 days, during which many potential buyers might be more concerned about pump or food prices than buying new phone, it seems a bit early for Apple to start cutting orders from wherever their initial orders were weeks ago. Yes the Ukraine war has been raging for 36 days, but it took some time before the world realized that Russia was looking to take over the entire country and not just a few provinces.
All in, the world has moved into a new mode, one not seen, especially in Europe, for many years and that will set many similar estimates for CE products off balance. While we believe Apple could have already contacted suppliers about possible order reductions, things remain very fluid and with 3 quarters to go for this year, any order reductions could easily me made up later in the year if the socio-economics environment changes, and we have no absolute understanding of Apple’s real order estimates to suppliers, only those of analysts, so without a crystal ball, we expect much of the speculation over potential iPhone SE order cuts is just that, speculation and is subject to change almost daily.
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