Even if Apple inc. AAPL struggling with production issues due to the situation in China, an analyst said iPhone sales are likely to surpass estimates for the next two quarters combined.
Mixed signals in the December quarter: Turnaround times – the time between placing the order and the actual delivery of the product was 4.3 weeks for the iPhone 14 Pro/Pro Max models during the week of December 9, Gene Munster, said co-founder of Loup Funds. This compared to 0.9 weeks for the iPhone 13 Pro model for the week of December 12 last year, he noted.
The year-over-year increase in lead times is due to a combination of tight supply, caused by COVID-19 restrictions in China, and favorable demand for the Pro models, he added.
Apple’s chip supplier Taiwan Semiconductor Manufacturing Company Limited TSMApple, which builds the tech giant’s A16 chip used in iPhone 14 Pro models, is on track to report 47% revenue growth for the December quarter, the venture capitalist noted. This is unchanged from the 48% growth in the September quarter, when Apple reported 10% year-over-year iPhone sales growth, he noted.
That doesn’t mean Apple’s iPhone revenue growth in the December quarter would be 10% because of the lag between when TSMC sells to Apple and when the chips are used in the iPhones and the product is sold, Munster said.
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Upside likely in the coming months: Munster recorded two data points negative for iPhone demand in the December quarter. First, the company’s pre-announcement indicating that iPhone Pro model sales are soft, and second, the longer-than-normal lead times late in the quarter suggest softness.
TSMC’s strong sales in October and November are measurably better, but suggest that even with the delays, the December quarter is poised for an upward spiral, the analyst said.
“If we add up these three forces, it’s unclear if the iPhone will exceed December’s estimates,” said Munster.
Leaving aside the iPhone assembly timing and combining estimates for the December and March period, the analyst expects an increase in iPhone sales in the coming months.
Apple closed Friday’s session down 0.34% at $142.16, according to data from Benzinga Pro.
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