Apple Inc. may move more iPhones in the current quarter than analysts have been expecting, if the latest data from Morgan Stanley is correct. Analyst Katy Huberty said their AlphaWise Smartphone Tracker suggests demand for 67 million iPhones during the December quarter.
Apple’s iPhone numbers pull ahead of estimates
That’s more than her estimate of 62 million and the sell-side consensus estimate of 63 million iPhones. The analyst believes iPhone estimates on the buy side have risen higher than sell-side estimates to the mid-$60 million or higher range.
Additionally, she reported that data from Apple’s supply chain suggests iPhone builds of between 65 million and 70 million for the December quarter, suggesting that demand is tracking about in line with builds.
Apple plans to raise channel inventory
According to Huberty, if the current iPhone numbers hold out for the last couple of weeks of the year, then channel inventory fill will move into the March quarter or possibly later, reports Street Insider.
The analyst noted that Apple management said they intend to increase channel inventory for the iPhone from their previous target range of between 4 and 6 weeks to between 5 and 7 weeks. Apple also stated that it was below the targeted 4 to 6 week range going into the current quarter. Huberty believes if Apple is able to replenish two more weeks of its channel inventory, it could add approximately 7 million units to end iPhone demand.
Apple remains strong in China
Huberty also examined data from different parts of the world, saying that Apple appears to be doing about as expected in the U.S. She said U.S. demand for the iPhone is tracking in line with global demand trends. In China, she said demand is at almost three times global year over year growth. Apple released the iPhone 6 and iPhone 6 Plus in China on Oct. 17, putting it about one month after the U.S. launch.
The analyst also found that demand in Brazil remains very strong and is higher than global trends. She said it’s at least somewhat related to the Nov. 14 launch of the new iPhones there. Huberty found demand in Japan and France to be a bit lower than global growth. She said the higher consumption tax that began in April could be affecting demand in Japan. Also regulators there kept some carriers from doing some promotions there, which probably affected Apple.
Huberty continues to rate Apple stock as Overweight with a price target of $126 per share.
