Between analysts disagreeing on what supposedly soft sales of the consumer iPhone 14 models mean to Apple exerting its importance to TSMC, there’s plenty to see from today’s shift on the Observation Deck. In addition to those two big pieces of news, we saw Apple announce its next earnings call, new public beta builds and more. Don’t forget to listen to today’s Daily Observations podcast, featuring special guest Rob Black. The financial analyst and radio and podcast personality gives his take on how well Apple is doing in 2022 and going forward. Oh, and we hear about Nick deCourville‘s super top SEcret Apple Watch experiment.
New Feature: It’s Not Just Me!™
Variation on a theme: It’s not just me! Yesterday, I told you of a post from Bloomberg under the headline, “Apple Ditches iPhone Production Increase After Demand Falters.” I also questioned the headline’s assertion since everything I’d seen had indicated that sales for the iPhone 14 in terms of units had for weeks (maybe months) been expected to match sales of iPhone 13 — no more, no less.
Happy to say: It’s not just me!™
Ming-Chi Kuo Not Buying It
A few analysts responded Wednesday to Bloomberg’s story, with reactions ranging from “huh?” to “nuh-uh.” We’ll start on Twitter, where we find TF International analyst Ming-Chi Kuo questioning/refuting the report. He says the report sounds “a little bit weird.”
In a series of Tweets the analyst said that (1) “Apple had production switch plans from iPhone 14/14 Plus to iPhone 14 Pro/14 Pro Max,” but he hadn’t heard anything about an “overall iPhone production increase plan.” He also indicates that Apple might be cranking out more iPhone 13s than previously intended. (2) While noting “lackluster” demand for the consumer end of the line, the analyst reiterated his forecast of a 10% increase in sales for this year’s Pro phones, leading to higher Average Selling Prices (ASPs) for iPhone in the December-quarter. (3) He then doubles down on unit numbers staying the same, saying “the order increase for iPhone 14 Pro, 14 Pro Max, and price-cut 13 could offset the potential order cut of iPhone 14 and 14 Plus.” That keeps him expecting iPhone unit numbers to be flat. All of that said, he says (4):
I predict that Apple will likely offer a positive outlook for 4Q22 at the next earning call assuming iPhone shipments won’t decline significantly starting December.
Daniel Ives Not Buying It
I cryptically called for a rough day for Apple shares after the Bloomberg report. That was the “Have a good Wednesday” comment yesterday. Not cryptic at all in such a prediction was Wedbush analyst Daniel Ives. Apple 3.0 posted part of a note he wrote Wednesday — I assume before the markets opened. His concern was that the negative Bloomberg news:
…in light of an already shaky macro and jittery market [would] send shockwaves across the Street with investors concerned this is another shoe to drop in this dark market with golden child Apple front and center.
Quick aside: It only played out that way for Apple. A piece from Reuters (via Apple Stocks) illustrates that, saying:
Wall Street ended sharply higher on Wednesday following its recent sell-off, helped by falling Treasury yields, while Apple dropped on concerns about demand for iPhones.
Ives was not a fan of the Bloomberg piece, arguing that:
…the headline of “not increasing production” (~6 million units) overshadows the underlying story for iPhone 14 Pro demand that is currently playing out in the field.
After pointing to high rates of adoption for iPhone 14’s Pro end versus the consumer side and what that’ll mean for iPhone ASPs, the analyst addressed the fewer iPhones intimation, saying:
As we have discussed initial iPhone 14 units was roughly 90 million and is in line with iPhone 13 and that remains firm/unchanged. However the mix is heavily shifted towards Pro while the base model iPhone sales have clearly been underwhelming and softer than Apple expected.
Mr. Ives has an “Outperform” rating on Apple shares. His price target on the shares is $220.
Erik Woodring Not Buying It
One more analyst calling bull-nanigans on the Bloomberg story was Morgan Stanley’s Erik Woodring. AppleInsider had him doing the Daniel Ives thing — pointing to long waits for the higher priced iPhone 14 Pro phones. The piece also had the analyst indicating “that the build estimates for the iPhone 14 are in-line with [his firm’s] predictions for production.”
Apple Plans 4QFY22 Earnings Report for 27 October
While we’re never ever ever going to hear iPhone unit sales numbers from Apple again ever, we’ll get some much craved color from the company in just under a month. Apple let the planet know Wednesday when it’ll report fourth-quarter fiscal year 2022 revenue and earnings.
Would you like for me to tell you? Okay. Apple’s Investor page says those are set for Thursday 27 October. They’ll be released via press release after the closing bell. Then, roughly half-an-hour later — 2PM Pacific/5PM Eastern — execs will hop on the phone with analysts for a good, old fashioned chinwag. You can listen to that as it happens on Apple’s site. The company will make it available as a podcast soon after. We’ll hit lights both high and low on Friday 28 October. And if you missed any of that — don’t worry. I will be repeating it quite a bit between now and 27 October.
Ming-Chi Kuo Forecasts the Future
It was a fairly busy day on Twitter for TF International’s Ming-Chi Kuo. After calling the Bloomberg assertions into question and stressing strength for the Pro end of the iPhone 14 line, he took a couple of Tweets to do something between extrapolation and prognostication. The first he used to once again point out the strength seen for Apple’s latest Pro phones. That led to the second Tweet’s prediction:
I think this result will encourage Apple to create more differentiation between iPhone 15 Pro Max & 15 Pro to raise 15 Pro Max shipments and enhance the iPhone product mix.
iPhone 15 Pro Pro? iPhone 15 Pro Ultra? iPhone 15 Ultra Pro.
He also had thoughts on Apple Car. Busy Twitter day, as I say. One Tweet this time — short and… Tweet:
My latest survey indicates that Apple will likely build the new Apple Car project team before the end of 2022.
Report: Apple Refuses Higher Prices Planned by TSMC
An interesting story Wednesday about Apple and its silicon supplier, TSMC. The Mac Observer highlights a report that originated with the Taiwanese site UDN. According to that, TSMC “planned to raise its chip prices by 6% to 9%.” That is a plan that Apple has reportedly refused.
You can see where TSMC would think it could do that. It is, as the piece points out, the “world’s leading advanced semiconductor manufacturer.” It also supplies all of Apple’s significant processors at this point. At the same time, business with Apple accounts for more than a quarter of TSMC’s total revenue, so you could see where Apple think it could refuse the increase.
It could be that Apple doesn’t want to be punished for the sins of others. According to TMO:
TSMC has (…) struggled with understanding real demand for its products recently. Clients have been prone to ordering more chips than needed, hoping to secure production line space during a time of semiconductor shortage. When demand for the clients’ products [fails] to coalesce, they cancel those orders.
While Apple may not have been one to cancel orders, TSMC reportedly hoped to increase prices for all of its clients in order to prevent such abandoned orders.
Whatever the case, TMO says, “it sounds like Apple is confident enough in its importance to TSMC’s bottom line that it can refuse to pay more.” Because what you really want in uncertain economic times is a… spitting contest.
Public Testers Get New iOS, iPadOS, and macOS Betas
As day follows night, so public testing betas follow developer betas. I told you Wednesday of Apple seeding betas of iOS, macOS, iPadOS, watchOS, and tvOS to developers. Now a couple of pieces from MacRumors have the Cupertino-company making new betas of iOS and iPadOS 16.1 available to its public testing program, along with the seventh public beta of macOS 13 Ventura.
App Store Antisocial for Russian Social Network
Apple has removed the app for the Russian social network VK from the App Store worldwide. A piece from TechCrunch says the company made the move to comply with UK law. The piece quotes a statement from Apple, saying:
These apps are being distributed by developers majority-owned or majority-controlled by one or more parties sanctioned by the UK government, in order to comply with these sanctions, Apple terminated the developer accounts associated with these apps, and the apps cannot be downloaded from any App Store, regardless of location. Users who have already downloaded these apps may continue to use them…
Of course, they won’t be updated. Additionally, the piece says there may be problems with payments and notifications. For its part, the Russian social network said in a blog post that “VK will continue to develop and support applications for iOS. Our experts do everything to maintain and continue to improve user comfort…”
The Russian government, meanwhile, seems a bit less stiff upper lip. After the app’s removal, a piece from AppleInsider had Russian regulators saying that the app’s removal “will impair communications between its citizens…” Regulators call the app’s removal “discriminatory,” and are said by the piece to be “demanding answers.” No word on what exactly that demand entails, nor on a timeline for answering to it.
Billie Eilish Wrapping Latest Tour on Apple Music Live
And finally today — if you’re looking for a musical way to end your week, plan to be near an Apple device tomorrow. AppleInsider ran a piece earlier this week saying that Billie Eilish will end her latest tour Friday 30 September on Apple Music Live.
According to the report, “The concert will be streamed live from the O2 Arena in London.” Despite that assertion, this sounds like another one of those live/not live things. AppleInsider says the show kicks off on Apple Music at 10PM Eastern. That’ll be three in the morning in foggy London town.
Maybe that’ll be live, but my thinking is … no.