Apple (AAPL) Checks Show Weak iPhone and MacBook but Strong iPad/iWatch/AirPod Business - Longbow
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Longbow Research analyst Shawn Harrison reiterated a Neutral rating on Apple (NASDAQ: AAPL) on the belief that FY3Q/CY2Q iPhone production is tracking in line with forecasts. However, while the analyst's checks indicate the potential for up to a high-single-digit decline in launch volumes for FY19, his FY4Q iPhone shipment forecast is 6% ahead consensus because he believes a normal iPhone launch cadence is underestimated by consensus.
Key points from the analysts checks:
1) Contacts expect 3 next-gen iPhones including one LCD and 2 OLED iPhones and a normal launch cadence vs. the staggered launches of CY17 and CY18.
2) AAPL delayed end of life production timelines for some models, continuing to produce a variety of older iPhones including the 6 and 6s, supporting Longbow’s more conservative view of 2H ASPs.
3) AAPL supplier sales trends weakened for June, but CY2Q sales beat seasonality.
4) Apple Watch, iPads, and AirPod demand is strong and orders are up year over year.
5) MacBook orders are declining.
Shares of Apple closed at $204.55 yesterday.
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