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Let The iPhone 7 Build Number Rumors Begin

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There is an article from an Economic Times reporter after visiting Apple ’s iPhone suppliers that they will have to have enough equipment to build 72 to 78 million iPhone 7’s before the end of the year. This is in contrast to previous reports of 65 million units, which has helped the stock hit $97 this morning, up almost 2% in a market that is essentially flat. (Note that I own Apple shares).

Apple sold 74.8 million and 51.2 million iPhones in the December 2015 and March 2016 quarters, respectively. Since the company does not break out sales by model it is difficult to determine, besides the report that orders for the iPhone 7 seem to have increased, if iPhone growth will return with the 7 since some of the iPhone's built by the end of the year will actually be sold in the March quarter.

Source: Apple

The company has also been known for (at least through newspaper articles and analyst reports) to change production orders multiple times. This is not surprising since in reality Apple doesn’t know how many it will sell and having suppliers gear up to a level a bit more than what may be needed could be the prudent business decision.

The iPhone SE will help total iPhone sales since its lead-times remain at 2 to 3 weeks in the US and China even though it has been available for almost two months. It appears that there is solid if not strong demand for it and I believe it will be a strong holiday seller.

However when looking at the SE’s adoption rate it is the slowest ramp of any iPhone since Fiksu started tracking them with the iPhone 5. The SE does have the headwind of the install base being larger than any other iPhone since the measurement is based on percentages and not absolute numbers. Additionally Fiksu may not capture international sales completely where the SE may be doing well.

Source: Fiksu.com

For a recap of investor oriented Apple news from last week check out my “Apple Investor Weekly”.