Analyst: iPhone 12 Sales Still Strong Despite Weaker Demand
JP Morgan analyst, Samik Chatterjee, has issued a note to investors decreasing his 2021 iPhone sales expectations from 236 million units to 230 million units. Although a decrease in expectations, it’s still representative of a 13% overall increase compared to last year.
This latest investment note signals Chatterjee’s belief that demand for the iPhone 12 is weakening as time progresses.
So, basically, it’s a common-sense approach toward demand for a product that was released approximately five months ago and which would have seen an initial spike in consumer interest but would slowly dwindle over time. However, Chatterjee’s expectations of 230 million units throughout 2020 show his belief that demand is still strong for the iPhone 12 and the hardware is still holding its own against increasing competition.
In addition to a natural slowdown in purchases for the iPhone 12 series, JP Morgan’s investor note is partially backed by less-than-expected demand for the iPhone 12 mini. The iPhone 12 mini is the smallest and most affordable smartphone in the iPhone 12 series and Apple – as well as investors – would have hoped that it would have proven to be one of the most successful devices in the range. The iPhone 12 mini made up just 6% of iPhone 12 sales in the United States in October and November.
Due to that slow demand, Chatterjee and other analysts expect Apple to cut the iPhone 12 mini from production altogether during the next quarter.
In addition to a natural slowdown for a product that is approaching 5 months old, Chatterjee and his fellow JP Morgan analysts have suggested that the revision of 2021 iPhone 12 shipments is also down to weaker than expected consumer spending in China. In short, people were excited about the iPhone 12 when it was first released due to the redesigned of the hardware and the 5G connectivity. Now, after a period of time, demand has weakened.
All fairly common sense stuff and a trend that repeats year-after-year. The good news for Apple is that the overall volume of sales for the iPhone are up year-on-year and will likely continue to be throughout this year.