Apple May Not Launch New iPhone SE in 2017

KGI Securities analyst Ming-Chi Kuo is predicting iPhone sales will drop in the first quarter of 2017 because he is not expecting a refreshed iPhone SE model that could perhaps reinvigorate demand during the slow post-holiday quarter.
The conservative estimate is because of weakening demand for the 4.7-inch iPhone and Apple losing market share in China to local OEMs. The analyst also notes that Apple is not expected to launch an updated iPhone SE in 2017 to avoid cannibalization of its high-end iPhone models. The lack of a new iPhone SE will lead to a decline in iPhone sales in Q2, 2017, with Kuo pegging the sales to be around 35-40 million units — down from the 40.2 million units that Apple shipped during the same timeframe in 2016.

iPhone 7 bill of materials costs are higher than previous versions, according to IHS Markit, which probably explains why Apple is not expecting its gross margins to improve during the current quarter.

“Total BOM costs for the iPhone 7 are more in line with what we have seen in teardowns of recent flagship phones from Apple’s main competitor, Samsung, in that the costs are higher than in previous iPhone teardown analyses,” said IHS’s Andrew Rassweiler.

The falling iPhone sales will also lead Apple to force its suppliers to further reduce component prices so that the company is able to maintain its healthy profit margin. Some components makers like display panel and PCB makers will have to give in to Apple demands. However, Samsung which supplies Apple with 3GB DRAM and 3D NAND flash can actually raise component prices due to the shortage of DRAM in the market. TSMC is also going to remain unaffected from Apple’s price cut demand since its foundries are usually pre-booked by companies in advance.



blog comments powered by Disqus
Octofinder Blog Catalog