BlueFin Research Partners analysts John Donovan and Steve Mullane today boost the number of "builds" of the next iPhone they think Apple (AAPL) is commissioning, writing that "pent-up demand" supports their view that Apple is preparing for "massive" manufacturing volume of the so-called iPhone X, which most expect will be unveiled during a media event in Cupertino next week, on September 12th.
The authors now expect that Apple is commissioning a total of 90 million iPhone units to be built, of varying versions, for the December quarter, up from the 87 million they modeled just a couple months ago, without citing sources.
The numbers "dispel any rumors of delays or component issues" with the new device, the authors write. "We are hearing that the launch date will be followed with a September 15th pre-order date and September 22nd for initial shipments."
The authors, who have been revising estimates for the device for two years now, think Apple is going to produce 5 million units of the iPhone X this quarter, followed by 46 million in the December quarter. They think there will also be 13 million units of a follow-on "iPhone 7S" model this quarter, and 10 million units of an iPhone "7S Plus."
The authors describe how Apple is planning for record manufacturing levels as its installed base swells over the next year:
According to our estimates, projected build plans for the balance of 2017 and for all of 2018 will be at record levels. With forecasted builds of 90M in Q4 and 270M in CY:18, it is clear to us that AAPL is counting on its massive installed base to step up and upgrade to the OLED and 7s models en masse. We continue to track increases in 2018 and 2019 build projections by tens of millions of units, and while forward projections are dubious, the possibility of sustained growth is welcome news indeed. The rationale behind this upside is that the step up to the new OLED design will filter across all offerings in future generation phones with an installed base hurtling towards 800M in the coming year. Additionally, as many as 350M of those phones will be over 2 years old by mid-2018 and should provide fertile ground for continued growth.
In fact, Donovan and Mullane are already modeling something called an "iPhone X2" in late 2018, perhaps with 16 million units in the September quarter of that year, and 65 million in the December quarter.
Apple shares today are down $1.19, or 0.7%, at $160.89.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
