The global smartphone market may be wobbling, but the iPhone 13 continues to sell well and Apple is expecting its upcoming iPhone 14 to do even better when it launches.
Appleslightly higher expectations for the upcoming iPhone 14″ highlights the growing belief among Wall Street analysts that the Cupertino-based company’s sales are likely to grow better than smartphone industry if the major economies enter a recession.
Apple, which reports its fiscal third-quarter earnings on July 28, conveyed its expectations to suppliers in its initial forecasts as it carried out pilot production. iPhone 14″sources with direct knowledge of the matter told Reuters.
With Apple at the higher end of the market, analysts believe inflation in core items like food and fuel has had less of an impact on its relatively affluent user base. That comes as industry watchers like Fubon Securities Investment Services president Charles Hsiao believe demand for consumer electronics in general will slow this year and next.
The economic downturn in China has had a major impact on the smartphone market, dragging global sales down 10% year-on-year to 96 million units in May, the most recent month to see the number of smartphones sold. whether complete, follow to Counterpoint Research. This is only the second time in nearly a decade that the monthly figure has fallen below 100 million handsets, the company said.
But two Iphone Supply chain sources with direct knowledge of the matter told Reuters that iPhone sales continued to grow well in July despite signs of cooling demand for phone makers. other smart.
“Others are starting to get affected,” one of the sources said.
The second source indicates shipments in July for iPhone 13″ from a factory one-third higher than last July. That pattern is particularly unusual because sales of current iPhone models tend to slow down in July and August as consumers wait for new models that Apple traditionally releases in September.
“Judging by shipments, iPhone 13 sales are pretty good,” the second source said.
Cowen analyst Krish Sankar wrote in a note to clients that the iPhone has continued to sell well towards the end of its cycle in part because “Chinese demand rebounded strongly after the lockdown ended and iPhone be the beneficiary”.
In line with the annual schedule, Apple has begun trial production of the successor to the iPhone 13 with the goal of ramping up mass production in August so that the devices can begin shipping in the fall. Apple’s initial shipment forecast for suppliers is “slightly higher” than iPhone 13″ a year ago, the second source said.
“It’s a little bit higher than last year. It’s good, but not good,” said the second source.
For the fiscal third quarter that just ended, some Wall Street analysts are bracing for a slight decline in iPhone 13 shipments even if volumes at some individual factories are higher. But analysts still expect the iPhone to fare better than its rivals. Cowen, for example, expected Apple handset shipments to drop about 1% in the quarter just ended, while overall handset shipments could drop as much as 13%.
The difference between Apple and Android The market is rippling through Apple’s supply chain.
“Because SAMSUNGSong Myung-sup, analyst at HI Investment & Securities, said that of the display unit, it is expected to have better-than-expected performance in Q2 due to iPhone shipments, which are smartphones. The only alliance with strong sales.
Cowen maintained a “better” rating on shares of chipmaker Skyworks Solutions, noting that it receives about 55% of its revenue from Apple for an iPhone radio chip. In contrast, Skyworks rival Qorvo gets 30% of its revenue from Apple and has more exposure to the Android phone market. Cowen downgraded Qorvo to “performance in the market”.
Cowen analyst Matt Ramsay wrote in a note to clients: “Skyworks’ greater exposure to Apple in its mobile business is likely to insulate the company for the foreseeable future from significant impacts. relating to…reduced demand modifications”.
© Thomson Reuters 2022