Analyst: iPhone production on track

But there could be a wait for the lower-priced model, says Rosenblatt’s Jun Zhang.


From a note to clients that landed on my desk Thursday:

Smartphone shipments are expected to be healthy in Q3 and Q4, with an iPhone production ramp still on track for the latter half of the year. We believe the slightly late iPhone LCD model production ramp could lead to positive sentiment surrounding iPhone sales in late September. Our work also suggests Chinese OEMs will increase their orders in Q4 in order to achieve 2018 shipment targets.

Our research suggests Apple’s iPhone ramp is still on schedule this week. Two new OLED iPhone models are expected in the initial ramp this week, followed by an LCD model with a smaller production. We believe the late ramp of the LCD model could result in multiple week wait times for consumers who want to buy the new LCD iPhone model, and could send a positive signal for initial iPhone sales.

We believe many component suppliers could face pricing pressure due to smartphone OEMs decreasing gross margins. In addition, smartphone OEM adoption of tri-camera, 3D sensing, Bezel-less screen, and 8G DRAM, could lead to pricing pressure on panels, speakers, microphones, camera modules, RF modules, metal casings, and finger print sensors. Companies that could be impacted from these pricing pressures include Cirrus Logic, Himax, Synaptics, Knowles, AU Optronics, Sunny Optical, and AAC.

Maintains Buy rating and $200 price target. (Apple’s Wednesday close: $215.05.)

My take: Zhang’s price target may not know what his rating is saying, but when it comes to Apple’s supply chain, his ear is as close to the ground as anyone’s.