KGI Securities analyst Ming-Chi Kuo is out with a new report saying the reported TrueDepth camera production issues won’t be “significantly addressed” before the end of the year. But once manufacturing issues are solved, iPhone X shipments will “pick up strongly” in the first half of 2018.
The so-called super cycle refers to the expectedly massive upgrades which stem from pent-up demand and a large base of owners of older iPhones whose wireless contracts are expiring.
As per comScore MobiLens, at the end of 2016 nearly 50 million people in the US owned iPhone 6 devices and about 22 million owned an iPhone 5s or older. That’s more than 70 million customers who are ripe for an upgrade cycle when the flagship iPhone X launches.
However, Kuo now cautions that the iPhone X super cycle won’t happen as soon as the OLED device lands on store shelves next month. Due to the ongoing production woes with the handset’s TrueDepth camera that will likely result in supply shortages at launch, the super cycle won’t really gain momentum until 2018, the analyst added.
Here’s an excerpt from Kuo’s note, obtained by MacRumors:
We think the real super cycle will be in 2018 for the following reasons: (1) TrueDepth Camera’s production issues will be significantly addressed in 2018; (2) new models launched in 2018 will enjoy a longer sales period than those unveiled in 2017; and (3) the product mix, specifications and designs of new iPhone models from 2018 will be more competitive.
As for 2018 iPhone models, Kuo is expecting a “longer sales period” for those devices than iPhone X. That’s because next year’s phones won’t suffer from availability and production issues as Apple and its supply chain partners will have perfected production processes.
Kuo said iPhone 8 sales in the Christmas quarter will be better than expected, but still cannibalized by iPhone X shipments in November. He is now projecting 210 million to 220 million iPhone sales in 2017 and between 245 million and 255 million shipments in 2018.