BTIG: Strong demand for iPhone 7 could lift Apple's return to growth in Q4

iPhone 7 (Apple)
Image: Apple

Strong demand appears to be leading to extended shipping dates for the iPhone 7, according to Walter Piecyk of BTIG Research. And that could signal a return to growth for iPhone sales during the fourth quarter.

Piecyk said shipping dates for Apple’s latest flagship phone two weeks following its launch are longer than they were at the same point last year for the iPhone 6s or 6s Plus, which launched a year ago. Apple’s online store estimates ship times of two to three weeks for all iPhone models other than jet black, according to BTIG, compared to less than a week for the iPhone 6S last year and seven to ten days for the iPhone 6.

And while some distribution channels offer shorter shipping times – T-Mobile is shipping the 128 GB iPhone 7 in two to nine days, for instance – customers have to wait even longer to get an iPhone 7 Plus than they did for the previous model.

The higher end model is particularly in short supply, Piecyk observed. And demand for models in the new jet black color is exceedingly high.

“In fact, at Verizon it takes 48-62 days to get a mid-range iPhone 7+ compared to 21-28 days last year for an iPhone 6s+,” Piecyk wrote. “Shipping estimates for the Jet Black model exceed those for last year’s Rose Gold model as well as 2013’s Gold model at this point in the sales cycle. In fact, Jet Black shipping estimates go as far out as December 15th, which might be close to a record wait time for a new iPhone, although we don’t know the shipping estimates from the original iPhone launch in 2007 that also had long shipping delays. Apple made a big deal about the manufacturing process of Jet Black, which could be impacting supply.”

Indeed, analysts continue to struggle to gauge whether extended wait times for the new iPhone are more related to high demand or limited stocks. But New Street Research last week noted “significant” pent-up demand for the new iPhone, and that demand may have ramped up recently given Samsung’s recall of its high-end Galaxy Note 7.

And that could provide a significant boost for Apple during the holiday season, capping a difficult year. The company posted a 23 percent drop in iPhone revenue during the second quarter as sales fell in key markets including North America, Europe and China.

“The initial results indicate longer waits for iPhones and are supportive to our thesis that Apple can return to growth in the December quarter,” Piecyk wrote. “Clearly, Apple’s allocation of iPhone supply can impact this analysis, but the growth in orders cited by the operators we have spoken with in the United States AND Europe over the past two weeks suggest that demand is likely the driving factor.”

For more:
- read this BTIG blog post

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