According to Cowen, data from the supply chain show that iPhone production will increase before the end of 2021, while Android will remain stable and may not increase at all. In a note to investors, Cowen analyst Krish Sankar said that iPhone manufacturing in the third and fourth quarters of 2021 will increase by 21% year-on-year.
Although the iPhone’s production target has been revised upwards, Sankar pointed out that the production forecasts for Samsung, OPPO, Vivo, Xiaomi, and Honor, among other Android mobile phone manufacturers, remain unchanged.
There are other signs that Apple’s iPhone 13 series is enabling the company to grow while the smartphone market is stagnant. For example, the iPhone 13 pre-orders of Chinese retailers increased by double digits year on year.
The iPhone manufacturing volume in the third quarter has increased from 48 million units to 51 million units, and it may even be higher than the 51 million units previously predicted. The analyst predicts that the production volume in the fourth quarter of 2021 will be 82 million, which is higher than The previously estimated 78 million.
In addition, Sankar also talked about the decline in iPhone orders reported by China in August. Although the CAICT data in August showed that the M/M of China’s iPhone sales declined, this may be due to lower demand before the new product launch, Sankar wrote. The pre-order data for the new iPhone 13 in China seems to be very strong.
The analyst said that in the second half of 2021, the iPhone 13 production plan is still forecast to be 90 million to 95 million, a year-on-year increase of 23%. In the investor note, several other Cowen analysts said that Apple’s increasing production volume may be a boon for its supply chain partners, however, they have not improved these upstream forecasts.
Sankar maintains its 12-month AAPL target price of $180. He drew this forecast by using a profit multiple of 25 times for Apple’s core business and a profit multiple of 45 times for the service industry. The new 2022 earnings per share forecast are $5.30, mixed with a 33 times price-to-earnings ratio.
