Prior to Tomorrow's Apple Event, a last minute report from Ming-Chi Kuo touches on iPhone 13, Apple Watch 7 and AirPods 3
On Friday we posted a report titled "Apple Analyst Kuo: Mass Production of Apple Watch 7 is set to Begin, with Luxshare playing a Major Role in 2021 and 2022." Prior to the Apple event tomorrow, TF International Securities' analyst Ming-Chi Kuo has released an English client report on Apple.
Abstract: "Apple will hold a new product event on September 14, and the market expects to see new hardware products, including iPhone 13, Apple Watch 7, and AirPods 3. We believe the market's focus on these hardware products varies, with iPhone 13 focused on pricing, Apple Watch 7 on pricing and availability, and AirPods 3 on pricing and product mix after the new model's mass production."
On iPhone 13: "We expect iPhone 13 ASP to increase due to the larger average storage, but iPhone 13 shipments will still grow YoY (vs. iPhone 12), thanks to the US ban on Huawei and new design and specification upgrades. The real challenge for iPhone shipments is the shortage of components (one of the biggest bottlenecks comes from TI).
- We forecast storage options of 128GB, 256GB, 512GB, and 1TB for the iPhone13 Pro and 13 Pro Max and 128GB, 256GB, and 512GB for the iPhone 13 and 13 mini.
- As the average storage of iPhone 13 increases, it is reasonable to expect that iPhone 13 ASP will also increase. However, thanks to the US ban on Huawei and new design and specification upgrades, iPhone 13 will still see YoY growth in 2021 shipments (vs. iPhone 12's 2020 shipments).
- We believe that iPhone’s current production challenge is the component shortage. Due to the component shortage, the legacy models had been cut by about 5–10% in 3Q21. The iPhone 13 shipment in 4Q21 may have a potential downside risk due to component shortage. However, this downside has a limited impact on iPhone 13 shipments. We believe that iPhone 13 shipments in 2021 can grow by more than 10% YoY (vs. iPhone 12 shipments in 2020)."
On Apple Watch: "The Apple Watch 7 mass production schedule has been slightly delayed, but the impact on the release schedule and mass shipment schedule is not significant.
- Due to the quality issues of the panel module, the mass production schedule for the Apple Watch 7 assembly has been slightly delayed until late September.
- We believe that the delay in Apple Watch 7 mass production will not affect the release schedule. Luxshare ICT, the main assembler of the Apple Watch 7, is now aggressively duplicating production lines and will start mass production of all production lines by the end of September, so the supply of the Apple Watch 7 will improve significantly from mid-to-late October."
On AirPods 3: "The focus of AirPods 3 is on price and product mix after the new model’s mass production. The overall AirPods shipment is expected to grow 10–15% YoY in 1Q22.
- We expect AirPods 2 production to continue after AirPods 3 enters mass production.
- We have two scenarios for AirPods pricing: 1) AirPods 3 price is higher than existing AirPods 2, and AirPods 2 price remains the same, or 2) AirPods 3 price is the same as existing AirPods 2 and AirPods 2 price cuts. In scenario one, the market will be neutral on the AirPods announcement. In scenario two, the AirPods announcement will be better than the market expectation for supply chain shipments.
- We believe that overall AirPods shipments will be about flat YoY in 4Q21, benefiting from the demand of peak season and the new product, better than the YoY decline of market consensus. We forecast overall AirPods shipments to grow 10–15% YoY in 1Q22, better than the YoY flat/decline of market consensus, because of the new model and a lower AirPods shipment base due to inventory corrections in 1Q21."