According to a report from Pacific Crest, Apple is planning on building 14 million to 15 million iPhone 3Gs, as apposed to the 18 million previously believed for 2008. Additionally, iPhone 3G sales have seen their highest sales numbers in a research note by RBC analyst Mike Abramsky.
Citing “supply chain channel checks” (which might mean sitting at a desk and making phone calls to retailers, its being reported that Apple is cutting its iPhone 3G production plan. Analysts however speculate that the lower build-out plan won’t negatively affect Apple, and explain that it will directly affect makers of the internal components the iPhone uses.
ZDNet cites a few interesting points from the report:
• Pacific Crest found that AT&T stores are seeing inventory drawdowns of 8 GB iPhones through late August and mid-September. The upshot: “The popularity of the 8 GB model reinforces our concern that smartphone demand has shifted to a lower price point. We are also concerned that if Apple chooses to refresh its lineup with a 16 GB model at $199 and a 32 GB model at $299, this could put additional price pressure on the handset industry and, by extension, the component suppliers.”
• There is a caveat to that aforementioned point. Pacific Crest analyst Adam Hargreaves said in a report that the shortages of 8 GB iPhones could be an intentional drawdown as Apple plots a lineup with more capacity.
• Suppliers are expected to take a hit. Pacific Crest cut revenue estimates for Skyworks Solutions and Triquint Semiconductor–two companies that make power amplifiers for the iPhone 3G. Linear Technology, On Semiconductor and National Semiconductor could also face some turbulence on Apple’s move.
• The shift to lower-priced iPhones will push pricing down for other handsets. We saw some of this worry on RIM’s conference call. RIM is aggressively going after the consumer market and launching new models. RIM also noted that it can’t pass on higher costs to customers. This ripple effect may impact Marvel and Broadcom, according to Pacific Crest.
• NAND memory prices will continue to fall. Apple alone wasn’t able to cure an inventory glut of memory and its cuts to iPhone builds certainly won’t help. Simply put, there’s more pain ahead for Sandisk and Micron Technology.
Silicon Alley Insider is reporting that Apple’s iPhone 3G sales may now be near 6 million for the the quarter that ended Sept. 27, citing “checks.” “That’s up from his previous estimate of 5 million and is also higher than every Wall Street estimate we’ve seen so far, including 5 million from both Morgan Stanley and Piper Jaffray,” Dan Frommer explains for SAI.
Abramsky got to the 6 million following the criteria below:
• 900,000 upgrades; 15% of its 6 million install base of first-gen iPhones
• 388,000 sell-in (6 weeks inventory) in the 20 latest countries to sell iPhones
• 280,000 sell-in for Best Buy (BBY) — also six weeks inventory
• 4.43 million sell-through in the first 22 iPhone countries, including 1.7 million in the U.S.
RBC analyst Mike Abramsky expects Apple to sell around 24 million iPhones next year.
