Top analyst explains why he expects Apple to ship fewer iPhones than expected this quarter

Top analyst explains why he expects Apple to ship fewer iPhones than expected this quarter
Apple knows that the deadly and spreading coronavirus is a huge problem in China. The company widened the range of its fiscal second-quarter revenue forecast due to the uncertainty over what might happen in the current calendar quarter that runs through the end of March. CNBC reports that crystal ball wielding TF International analyst Ming-Chi Kuo recently sent out a note to clients revealing his expectations of a 10% cut in calendar Q1 iPhone shipments; Kuo is blaming the shortfall on the coronavirus.

Earlier today, we told you that Apple had temporarily closed its stores and offices in China where over 300 people have died from the virus. In his note, Kuo wrote "Our latest survey indicates that the iPhone supply is being affected by the coronavirus and, therefore, we cut the iPhone shipment forecasts by 10% to 36-40 million units in the calendar first quarter of 2020 (Apple's fiscal second-quarter)." While the manufacturer no longer releases the number of iPhones it ships during the quarter, Kuo estimated that Apple delivered 38 million handsets during the calendar first-quarter of 2019. So for the current quarter, the analyst sees iPhone shipments declining by as many as two million units or rising by the same amount.

Because of the coronavirus, Kuo cannot forecast Apple's calendar Q2 iPhone numbers

As for the calendar second quarter of 2020, Kuo says that he can't make a prediction for the calendar second quarter because of the coronavirus. More precisely, he told TF International clients "It’s difficult to predict the shipments in 2Q 2020 because of the uncertainties of the coronavirus epidemic and consumer confidence."

For the holiday shopping season covering October through December, Apple recently reported iPhone revenue of $55.96 billion. That made the 2019 holiday season the second-best for the iPhone in terms of revenue trailing only the 2017 holiday season. During the company's post-earnings conference call, CEO Tim Cook said to expect the company to report fiscal second quarter revenue of $63 billion to $67 billion.

Apple made a number of changes to the iPhone in 2019 adding an ultra-wide camera to the latest line. It also added a feature called Deep Fusion that takes eight exposures before the shutter is pressed. Overall, there are nine exposures and the neural engine in the A13 Bionic chip goes through each pixel to select the ones that create a sharper image with less noise. Apple's new Night Mode is enabled automatically whenever the camera detects that it is being used in a low-light environment. With Night Mode, viewable photos can be taken in the dark without having to employ the flash.

Apple also improved the battery life on all three of its new phones with the iPhone 11 lasting up to one hour more than the iPhone XR (which had the best battery life of any iPhone in history before last year's models were released). The iPhone 11 Pro gets up to four hours of additional battery life compared to the iPhone XS, and the iPhone 11 Pro Max delivers up to five hours of additional battery life compared to the iPhone XS Max. Water resistance has also been greatly improved with the iPhone 11 able to withstand being submerged to a depth of as much as 6.5-feet for as long as 30 minutes. The iPhone 11 Pro and iPhone 11 Pro Max can both be submerged to a depth of 13 feet for as long as 30 minutes and escape unscathed. Just keep in mind that water damage still isn't covered by the iPhone's warranty. Apple says that the new iPhones sport the toughest glass ever found on a smartphone and the phone itself can better survive a drop or fall.

Yes, the 2019 iPhone models are tough. But it looks as though they are going to be affected by the coronavirus as companies in China from contract manufacturers like Foxconn and Pegatron to firms along the supply chain have to scramble to assure the safety of employees.



16. Venom

Posts: 4114; Member since: Dec 14, 2017

Of course if Apple hadn't moved off to the communist China with their sweatshops making overpriced iPhone we wouldn't have this problem. Just my opinion on the matter.

3. Wazupmrg

Posts: 225; Member since: Apr 10, 2017

How about, the phone isn't worth the price. If you want a shiny status symbol, go ahead and spend the cash. You want true technology? Pass....

4. meanestgenius

Posts: 23084; Member since: May 28, 2014

I don’t know of any flagship that’s “worth the price” when you consider that Samsung and Huawei are also selling $1,000+ smartphones. True technology? While Apple doesn’t hand the most feature rich smartphones on the market by any stretch of the imagination, they do pack some “true technology” into their smartphones. Their SoC’s are the best in the smartphone business. The cameras on their smartphones are usually among the best in the business. FaceID, while I prefer a fingerprint scanner, is industry leading. People who buy iPhones don’t buy them because they are packed with features and all of the latest specs. They buy them for ease of use, cohesiveness between other Apple products, performance, great camera, and because Apples ecosystem is unmatched.

6. cevon3239

Posts: 217; Member since: Jan 01, 2020

What? Even though no phone should be $1000, the S and Note; most certainly give a bit of justification. Both offer more storage, faster file transfer, faster charger, bigger displays, bigger batteries, higher resolutions, better cameras, more new tech like 5G modems, faster modems more versatility, more customization, better quality headphones in the box, cables of better quality too. Samsung phones offer far and away moree advanced features and so much more. Samsung phones are overpriced too, but you still get far more than any iPhone. And I don't if an older iPhone gets all the updates on the planet, it will still do the same things it did hardware-wise no matter which version of iOS it gets. The iPhone is a nice device that is overpriced considering what you get. Having nice cameras and lacking in 100's of other ways is not enough for me. And once the S20 drops, its gonna show even more just how great a $1000 phone should be. Just like a Windows PC is better spec'd and more capable than any Mac at twice the price. No one wants to match limited service that are not cross-platform. Sometimes being In a walled-garden is good and sometimes it isn't. Its not that companies like Google and Microsoft have what Apple has, they never wanted to do it that way. Apple may make lots of money, but others actually offer products that are more beneficial for what they cost.

8. meanestgenius

Posts: 23084; Member since: May 28, 2014

First of all, you’re making it real obvious that this is you with your 25th account, techie. The way you cream all over Samsung is unmistakable. Now: NO smartphone is justified at $1,000. But I’ll play. There is NO smartphone OEM that offers the ecosystem that Apple does. That’s what matters more to the average consumer than faster this and bigger that. Brick and mortar stores. Live, in person reps. Accessory after accessory after accessory. Services. These are the things that matter to average consumers, and there are far more of them than there are geeky tech (techie?) enthusiasts. This is why Apple has such an unwavering cult like following. They will buy the next iPhone guaranteed. And the next one after that. And the next one after that. It’s not just about growing customers, it’s also about retaining them, and no OEM retains customers more than Apple does. No question that Samsung, as well as many other Android vendors, offers far more features than the iPhone. But average consumers, who are the overwhelming majority that purchase smartphones, don’t care about that. Samsung smartphones are as overpriced as Apples iPhones. And while you get more in the way of features and the latest and greatest specs, Apple gives you more in the way of its ecosystem. It’s how it competes with the plethora of Android smartphone features. Yeah, Apples updates mostly squash bugs and improve performance, unless it’s a full OS version update. But again, Apple consumers, who are overwhelmingly average consumers, don’t care about that. The fact that Apple offers the best software SUPPORT in the way of 4-5 years of full OS version updates is what the average consumers care about more. Any smartphone that is over $700 is overpriced. Look what you said: It’s not enough for YOU. What matters to YOU doesn’t matter to the overwhelming amount of average consumers looking for a smartphone. Apple caters to the Average consumer, not the tech geek. The S20 is going to be a FANTASTIC smartphone. But no smartphone is currently worth $1000. There is no convincing me of that. Not when I can buy a smartphone from a Chinese OEM like Oppo, Vivo, Honor or Xiaomi and get the same features for less. I agree, PC’s are better than Macs. No argument there. That’s why I use PC’s/Windows laptops. That’s FALSE. MANY people want the “limited” service that Apple has, with the way their products are so cohesive and the way they work together. That’s why they sell more PREMIUM smartphones and more tablets and more wearables than any other OEM. Companies like Google and Microsoft want EXACTLY what Apple has in the way of its CASH. You’re fooling yourself if you believe otherwise. More beneficial is left open to the interpretation of the user as it pertains to what they use their tech gadgets for. I find it extremely beneficial how well my iPhone 11 Pro Max and iPad Pro 9.7 inch gel so well together. I can’t get that with a lot of Android OEM’s.

10. midan

Posts: 3272; Member since: Oct 09, 2017

If you think iPhone is overpriced, it just means you don't value the things it offers. For me the camera alone make it worth of the price. Sometimes people are completely forgetting how advanced tech these devices have inside. here's thereminder IPhone 11 vs $7500 Pro DSLR Camera Challenge! "Apple may make lots of money, but others actually offer products that are more beneficial for what they cost." So why don't people buy them? i think sales show that it's actually opposite, What Apple offers is clearly very beneficial for what it cost and people wan't to buy iPhone over and over again. Everyone value different things and clearly Apple have found very good overall packet for their products, based on their success year after year.

11. midan

Posts: 3272; Member since: Oct 09, 2017

"Just like a Windows PC is better spec'd and more capable than any Mac at twice the price." But you are missing the point completely, There's clear reason why most pro music producers are using Mac just like most graphic designers etc. People who are buying Mac's got enough for crashing software and computer and just the fact that all the time you have problems, which is very annoying if you have something to do, dealing with problems would ruin your work flow. When you buy a PC and software for it, it's like using android phone and apps. They are never optimized for your hardware, but instead for endless variations, you never know how well your phone for example runs certain game or apps. There can be very big differences in performance and stability with among different android phones. This is also one reason why people prefer iPhone and iPad. When there's new apps or games coming you will know you get in first day and it will run perfectly with your device, because it's optimized for that. But that's another story. I've been doing music with PC for around 15 years and i know exactly what is when all the parts are well parts without connecting each other, trust me there's lot of problems when you do very demanding stuff which needs lot of different parts and softwares to work together. Lot of mismatches when you install this from there and this from there and your hardware is already built from different parts. Usually this means that you have lot of software synth crashes, lot software crashes and sometimes those software plugins doesn't work at all, they are very power hungry, or you just have to spend lot of time and energy to get everything work. With Mac you buy whole packet just like you do when you buy iPhone or iPad, it's not about specs. For example you have professional music producing software which is optimized for that hardware which you are using. And this is coming from guy who have never owned Mac, but lot of my music making friends and graphic designers have changed to Mac and they couldn't be happier and now they can just do work and music and be creative instead worrying all the other parts which they have to deal with PC daily. More and more people want full packet which just works, that's the current trend.

5. gadgetpower

Posts: 335; Member since: Aug 23, 2019

How about you stick with your $200 android phones and be happy with it. Apple sells premium products with premium price and you can’t do anything about it because you are just an apple troll who cried about Apple’s pricing where in fact you can just ignore and buy an android phone.

7. Vancetastic

Posts: 1967; Member since: May 17, 2017

Have you ever even used an iPhone? iOS is different than Android, but to think there isn't "true technology" there is kind of silly.

9. meanestgenius

Posts: 23084; Member since: May 28, 2014

Yeah, people kill me with that one. iPhones aren’t packed to the hilt with features like many Android smartphones, but they do have “true technology” inside of them.

13. Vancetastic

Posts: 1967; Member since: May 17, 2017

On the flip side, we have midan, Apple's knight in shining armor on his white stallion. Man, I really can't stand fanboy crap.

14. meanestgenius

Posts: 23084; Member since: May 28, 2014

Lmao! He is overbearing with his cap for Apple.

15. Venom

Posts: 4114; Member since: Dec 14, 2017

I don't know Vance. I kind of see that fanboy feeling in others as well. Actually dial it up to a thousand. Definitely a fanboy for sure.

1. darkkjedii

Posts: 31805; Member since: Feb 05, 2011

Well that suck, but better safe than sorry.

2. meanestgenius

Posts: 23084; Member since: May 28, 2014

Facts. It’s shame, as these new iPhone 11 series is currently far and away the best iPhones Apple has produced. But the safety of its store personnel is first and foremost, so I don’t blame Apple for making this decision.

12. darkkjedii

Posts: 31805; Member since: Feb 05, 2011

Yes sirrr. I give them credit for that.

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