KGI Securities, the investment firm that was among the first to lower its shipment forecast for Apple Inc.'s (AAPL) iPhone X, is changing its stance, now saying shipments during the fourth quarter could be 10% to 20% higher than its past estimate.
In a research note covered by 9to5Mac, KGI analyst Ming-Chi Kuo, considered an iPhone expert with spot-on predictions in the past, said demand for the iPhone X remains strong and that improving supply isn’t due to slowing demand but improvements on the part of the Cupertino, Calif., technology giant when it comes to production. The analyst pointed to iPhone X manufacturer Hon Hai, saying shipments have increased to 440,000 to 550,000 units a day, which is up from 50,000 to 100,000 units shipped per day one to two months ago. He noted that other suppliers are also hitting their yields, which is resulting in growth in the number of phones that can be shipped.
“In our view, Apple wants consumers to receive their iPhone X as soon as possible. With production capacity rising substantially, it is only natural that buyers are seeing a shorter shipping time,” wrote the analyst. Lead times for users to get their hands on the iPhone X has dropped from a peak of five to six weeks when Apple started accepting preorders to within one to two weeks. It's also easier to purchase the device in stores in recent days. (See also: Why Apple Could Reach $1 Trillion Next Year.)
Robbing From Q1 Sales?
Kuo, who was first to raise concerns about supply issues with the iPhone X earlier in 2017, said the improved production, and thus supply, means some of the orders that weren’t expected to be fulfilled until the first quarter of next year will be shipped in the December-ending quarter, boding well for Apple’s earnings results. He did caution there could be “flat to slightly lower” shipments in the first quarter when compared to the fourth quarter. He said that shouldn’t be too surprising given the holiday shopping season that occurs during the last quarter of the year.
KGI isn’t the only one that is bullish on the iPhone X prospects. Earlier this month, TrendForce, the Taiwanese research firm, predicted Apple will overtake Samsung Electronics (SSNLF) to become the world’s biggest smartphone provider in the current fourth quarter. (See also: Why Samsung Stands to Gain If iPhone X Is a Hit.)
TrendForce forecasted Apple to hold 19.1% market share, which is up from 11.5% in the third quarter of this year. Sales of the iPhone X, iPhone 8, iPhone 8 Plus and the iPhone SE during the holiday shopping season are expected to boost its market share, propelling it to first place over Samsung.