According to Morgan Stanley's Apple analyst Katy Huberty, "Our Asia tech team led by Jasmine Lu believes supply chain inventory digestion has come to an end." Morgan Stanley's AlphaWise iPhone Tracker is calling for 56.5 million units to be sold during the current quarter. The brokerage firm itself sees Apple selling 49 million iPhones from January through March, while Apple expects to sell 52 million.
According to Huberty, China has been providing the strongest growth of any country that is monitored on the AlphaWise iPhone Tracker despite a weak economy in Greater China, including Hong Kong. She expects Apple to build 40 million new iPhones during its second and third fiscal quarters. That is a sign of strength for Apple, which historically has a percentage decline in iPhone production in the low- to high-teens from fiscal Q2 to fiscal Q3.
A wild card here is the 4-inch Apple iPhone SE. Huberty says that the phone could ship in time to have some units count during the current quarter (which ends on March 27th), but the majority of those units will ship during the June quarter. And that partially explains the strength in that period's production numbers that we discussed above.
Despite the better than expected numbers forecast by the iPhone Tracker, it would appear that Apple will still report a historic year-over-year decline in iPhone sales when the current quarter's numbers are released late next month.
Apple iPhone 6s
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source: StreetInsider via SeekingAlpha