Analysts with BlueFin Research Partners (via Barron's), shared some interesting information about Apple's (NASDAQ: AAPL) next-generation iPhone production plans.
Apparently, Apple -- like so many investors and industry observers -- is expecting the coming product cycle to be huge.
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First comes iPhone 7s
The BlueFin analysts reportedly said that Apple is set to have its contract manufactures churn out 53 million iPhone models in anticipation of the coming iPhone product launch.
Interestingly, of those 53 million iPhone models (that's a lot of iPhones), only between five and six million units -- or between 9% and 11% of the total output during the quarter -- will be of the premium iPhone with OLED display.
The remainder, the analysts reportedly said, will be made up of the company's liquid crystal display-bearing iPhone 7s and iPhone 7s. Those phones, unlike the OLED iPhone, are expected to retain largely the same size and shape as the current-generation iPhone 7 and iPhone 7 Plus, respectively, though with significant internal upgrades.
The iPhone 7s and iPhone 7s Plus are also expected to feature glass backs, rather than the aluminum backs of the iPhone 7 and iPhone 7 Plus, as well as a simplified color palette.
It's worth adding, though, that Apple often keeps prior-generation iPhone models available at discounted prices, so unless that practice has changed for this product cycle, some of that production could be of prior-generation iPhone 7 and iPhone 7 Plus models, as well.
However, that'll apparently change quickly in subsequent quarters -- if the BlueFin analysts' work proves accurate.
Big OLED iPhone ramp
The BlueFin analysts reportedly believe that Apple will produce 44 million OLED iPhone models in the subsequent quarter (the first quarter of Apple's fiscal year 2018) "and around 30 million each quarter thereafter."
Keep in mind that these numbers appear to refer solely to the premium OLED iPhone and that total iPhone build activity in those quarters could be even higher than the 44 million/30 million figures mentioned.
The analysts also said that "build plans for the balance of 2017 and for all of 2018 are at record levels."
Apple is clearly expecting a sustained period of robust iPhone shipments.
The risks ahead
While it's clear that both investor optimism and Apple's own optimism for the coming product cycle is rather high, it's important to realize that Apple delivering financial performance commensurate with that optimism is hardly guaranteed.
In fact, at this point, I would say that given the high expectations all around, Apple can't simply meet those expectations to deliver any sort of large boost to the stock price in the near-to-medium term -- it'll have to beat them.
Additionally, even if Apple delivers a series of blowout quarterly results, what happened following the blowout iPhone 6-cycle is probably still fresh in investors' minds.
Recall that following the iPhone 6-cycle, sales of the following iPhone 6s-series smartphones were lower than sales of the iPhone 6-series devices at the same points in their respective ramps.
If investors can gain some confidence that Apple has more up its sleeve for the 2018 iPhone cycle, then that could lead Apple's financial results to new high and bring the share price along with it. If it becomes clear that Apple has a relatively lukewarm update to its iPhone lineup for the 2018 cycle, then that could spell trouble for the stock price.
For what it's worth, I think Apple has learned from its mistakes and will have some cool stuff to bring out in 2018 (particularly as it may proliferate OLED displays across its lineup), but until Apple's results for the first quarter of its fiscal year 2019 are out, it's all just guesswork.
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