Declining lead times for iPhone 15 series means sales are weakening says analyst
It would be quite normal for iPhone 15 lead times to have dropped off since pre-orders began. After the first day of pre-orders, the iPhone 15 Pro Max in Natural Titanium wasn't expected to arrive until November 6th. Think about that. Those who pre-ordered this particular model from Apple won't receive their new device for another two weeks. But J.P. Morgan analyst Samik Chatterjee is not impressed.
The analyst wrote a research note for clients on Monday in which he wrote that lead times for the iPhone 15 series are now below what they were for last year's iPhone 14 line during the same time frame and called it another sign of weaker demand for the 2023 models. Apple's stock had declined for six consecutive trading days and another down day today would have resulted in the longest losing streak for the shares since January 2022. However, the streak ended as the stock rose 12 cents today.
Chatterjee still has an Overweight rating on the stock which means that fund managers should have a larger percentage of their portfolio in Apple than the benchmark they are trying to beat. For example, Apple currently makes up about 7% of the S&P 500 index. Fund managers trying to beat the S&P 500 should have more than 7% of their fund in Apple, according to the analyst.
Lead time for the iPhone 15 Pro Max is 25 days, but is shorter than the lead time for the iPhone 14 Pro Max at this time last year
In the research note, the analyst wrote, "Average lead times are now tracking to one day for the iPhone 15, 15 days for the 15 Pro, and 25 days for the 15 Pro Max, all of which are in line or below the lead times for the respective models in the 14 series during Week 6 a year ago."
Per Barron's, other analysts are also noticing the drop in lead times for the iPhone 15 line. UBS analyst David Vogt noted that last week the lead time for the iPhone 15 Pro dropped five days compared to the iPhone 14 Pro at this time last year. Ironically, while lower lead times are good for iPhone buyers, they are not great for Apple investors. Strong iPhone sales are very important for Apple as it is the firm's most important product. The iPhone was responsible for $205.5 billion of the company's $394.3 billion in revenue last year, or 52.1%.
Apple's next earnings report is coming on November 2nd and we are looking forward to seeing the revenue generated by the iPhone for the quarter which will be the fiscal fourth quarter of 2023 for Apple. During last year's fiscal fourth quarter report, Apple announced that thanks to the iPhone 14 launch, sales of its handset rose 9.67% year-over-year to $42.63 billion.
FCC OKs Cingular\'s purchase of AT&T Wireless
Things that are NOT allowed: