Just over a month ago KGI’s Apple analyst, Ming-Chi Kuo, wrote in a report picked up by MacRumors that while the company’s production problems with the iPhone X were getting resolved that he believed that there would only be 2 to 3 million units to be shipped into the distribution channel ahead of its launch. He cut his forecast from 30 to 35 million X’s in the December quarter down to 25-30 million. And he wrote that shipments would “pick up markedly” in the March quarter.
When the lead-times for the iPhone X started at 5 to 6 weeks and even though they fell to 3 to 4 weeks fairly quickly his thoughts mirrored what some other analysts were writing and seemed to be correct. While I have no window into the supply chain I wrote before the iPhone 8, 8 Plus and X were announced that the way to tell how management felt about its suppliers ability to ramp production would be to see how many countries would have the new iPhones on their initial ship date. When the press release said it would be available in 57 countries I believe this gave a solid indication that the supply of them would be better than what others were expecting.
There have been a number of data points indicating that the iPhone X’s demand has been at least solid if not strong with the wild card being that its lead-time has fallen to 1 to 2 weeks very quickly which could indicate that demand may not be as strong as many analysts believe. In a note reported by 9to5Mac Ming-Chi believes that the X’s shipments could be 10% to 20% higher than his previous estimate which would put them back to a range of 27.5 to 36 million. The mid-point of 31.75 million is only a little bit below his previous mid-point of 32.5 million so maybe there has been much ado about nothing.
Overall he believes that the X’s demand is strong and that its March quarter shipments should be flat to slightly lower than the December quarters. Since Apple doesn’t break out unit sales by model and that the iPhone’s March quarter unit sales have been down by 18% (post iPhone 6 launch), 32% and 35% the past two years, respectively, I believe it could be hard for them to be flat since the X’s lead-time is down to 1 to 2 weeks and production seems to be ramping well.
Ming-Chi puts the current production levels between 440,000 and 550,000 units per day (do take a moment to realize how many this is and pretty much how amazing it is that this many can be built on a daily basis). Previously it had been speculated that in mid-October there were 250,000 iPhone X’s being built each day.
