In the midsummer of July this year, Apple held its earnings conference call for the third quarter of 2020. Apple’s chief financial officer Luca Maestri admitted that the new generation of iPhone had to be postponed. As a result, the iPhone 12 really waited until mid-October to be officially released, and then had to wait until October 23 to ship, while the iPhone 12 mini and iPhone 12 Pro Max would not be shipped until November 13.
If you are just an ordinary consumer, you may think that the postponement of the iPhone will just make you buy it later; if you are an Android fan, you may have no feeling at all, and you will only complain about this new iPhone.But you may not have thoughtHow will the iPhone’s postponement to November affect the entire industry?。
In November, winter is approaching, and it is also the beginning of the shopping season in China and the United States.
Analyze from the point in time
Admittedly, this is not the first time the iPhone has been postponed. Since 2007, Apple has chosen to launch a new generation of iPhone in June for many years, and until 2011, the iPhone 4S was postponed to October. Then from 2012, Apple released a new generation of products (except iPhone SE, iPhone X and iPhone XR) in September every year.
Timeline of iPhone launch in recent years
But since this is not the first iPhone postponement, why does this postponement affect Apple and the industry? The reason is that even though the delivery time of the iPhone has been delayed several times, it has not been shipped until the end of October like the iPhone 12 for many years (above)。Moreover, in the iPhone 12 series, the two lowest and highest priced products: iPhone 12 mini and iPhone 12 Pro Max, both need to wait until mid-November before they can be shipped.
Earlier, when analyzing Apple’s Q3 earnings report, Odin mentioned that due to the delay in the iPhone launch date, Apple’s performance in the fourth quarter of 2020 (July to September) is likely to be affected. But I didn’t expect Apple to finally postpone the delivery date to late October, and some core products would not be released until November. As a result,Apple in In the first quarter of 2021 (that is, October to December 2020), an entire month of iPhone revenue will also be lost.
In 2017, although Apple launched the iPhone 8, the iPhone X will not be released until October; in 2018, Apple launched the iPhone XS, but the iPhone XR was also postponed to October, which will inevitably affect sales. As can be seen from the above figure, iPhone sales in the first quarter of 2018 (October to December 2017) and the first quarter of 2019 (October to December 2018) experienced a year-on-year decline.
Over the years, Apple has always had the so-called “iPhone dependence”: iPhone revenue accounted for up to 69% of Apple’s quarterly performance; however, due to the saturation of the smartphone market in recent years, the growth of the iPhone has slowed down, which has also directly lowered Apple’s performance. Therefore, Apple has been striving to expand new growth points in recent years, aiming to get rid of such iPhone dependence. But getting rid of iPhone dependence is by no means easy. As the iPhone accounts for a large proportion of Apple’s revenue, even if Apple Watch and other businesses such as software services grow rapidly, if the iPhone cannot maintain growth, it will be difficult for Apple to deliver brilliant financial reports.
However, the iPhone 12 is long overdue this time, and it happened to be the most important first quarter of the iPhone.
First quarter revenue and iPhone dependence
The performance of the first quarter of each year has always been very important to Apple.
Since 2013, Apple’s first quarter (October to December) has been the best quarter of its annual performance, and one quarter’s performance accounted for more than 30% of the annual share. In addition, since 2015, iPhone revenue has accounted for 60% of the quarter’s performance. Imagine that the iPhone’s revenue in a single quarter has exceeded $50 billion, which is more than twice the revenue of Qualcomm in 2019.So in these three months, Apple has earned 20% of the annual revenue of all products just by selling the iPhone.
iPhone’s first quarter results and its impact on Apple’s full-year results
Since Apple’s expected iPhone sales in the first week of the fourth quarter (July to September) will be moved to the first quarter, this will, to a certain extent, contribute to Apple’s performance in the first quarter of 2021. make up. However, DIGITIME still predicts that Apple will reduce iPhone sales to 63~68 million units due to the delayed shipment. According to IDC data, Apple sold 73.8 million iPhones from October to December 2019.That is, the iPhone’s postponement will cause a year-on-year decline in sales of 8% to 14%.
Why is Apple’s first quarter performance so important? The first is because it was mentioned earlier that Apple changed the iPhone to launch at the end of September since 2011, and the first quarter of each year happens to be the first full quarter after the launch of the iPhone. The second is the traditional Chinese sales season “Double 11”, which happens to be from the beginning of November to mid-November, while the traditional American sales season for Thanksgiving is in late November.
The importance of Double 11 is self-evident, and Thanksgiving in the United States is accompanied by two important shopping days: the first Friday after Thanksgiving, called “Black Friday”, is a barometer of offline shopping in the United States , And the following Monday is called “Cyber Monday”, the peak of online shopping in the United States. In terms of geographic location, the United States is Apple’s largest market, while China is the market with the largest sales potential. However, the iPhone 12 shipment day this time is very close to the peak shopping season of the two major markets in China and the United States, bringing Apple’s performance Hidden worries.
Catch up on Double 11 and Thanksgiving
Although the iPhone 12 and 12 Pro can barely catch up with Double Eleven, the cheap iPhone 12 Mini and the flagship iPhone 12 Pro Max can catch up with Thanksgiving Day in the United States. Isn’t it too bad? Well-known Apple analyst Ming-Chi Kuo believes that the proportion of iPhone 12 mini, iPhone 12, iPhone 12 Pro and iPhone 12 Pro Max should be 20~25%, 40~45%, 15~20% and 15~20% respectively. Therefore, the early shipment of iPhone 12 is believed to reduce the loss caused by Apple’s delayed shipment.
Image source: mixpanel
However, according to the calculations of the data analysis website mixpanel, after the launch of the iPhone 11 in 2019, the entry-level iPhone 11 accounted for 46% of the total traffic of the new iPhone at the end of the year. Together with the flagship iPhone 11 Max Pro, it accounted for 75%. % Above (above). In the 2018 iPhone XS series, even if the entry-level iPhone XR was delayed, it still accounted for 30.8% at the end of the year, and together with the high-end iPhone Xs Max accounted for more than 60% of the new iPhone market traffic.
In the product matrix of the iPhone in the past two years, the distribution has been polarized: entry-level products are the best sellers, followed by flagship products, and mid-end products are the worst. Is Guo Mingchi’s investigation correct or the data of mixpanel accurate? Currently unknown,But believeThis polarized sales distribution will be more obvious in the Chinese marketHowever, this time Apple lacks the two ace of entry and flagship in “Double 11”, which will inevitably have a certain degree of impact on the performance of the quarter.
In addition, iPhone 12 mini and Pro Max can barely catch up with the Thanksgiving season in the United States, but the hasty delivery time may also affect Apple’s distribution arrangements. After all, the current situation in the United States is still serious, and the global logistics and freight system is not as flexible and fast as before. Apple has to deliver massive iPhones to channels or directly to pre-ordered users within a short period of time. This is a huge challenge and disrupted the distribution and deployment of iPhone sales channels.
In addition to Apple’s performance dependent on the iPhone, because the iPhone in the US market relies on operators as a sales channel, US operators are also looking forward to the new 5G iPhone. The 5G coverage in the United States has always been limited by spectrum and it is difficult to expand quickly. Some analysts pointed out that operators are also looking forward to the early launch of 5G iPhone so that they can attract more users to choose 5G packages to accelerate the development of 5G in the United States.
At present, we still don’t know exactly how much impact this postponement of the iPhone will have on Apple. After all, if you want to buy an iPhone, you will buy it two months later. Even if it has an impact on the current season, as long as the production capacity is sufficient, it can be made up in the next quarter. The prerequisite is that iPhone production capacity must be sufficient.
iPhone 12’s productivity issues
Don’t get me wrong, this is not to say that no one wants the iPhone 12. Even if the iPhone 12 is postponed, considering that this year is the time when Apple will switch from 4G to 5G, the financial industry generally believes that the iPhone 12 will bring a new season of replacement wave, and even achieve double-digit sales growth. According to IDC data, Apple sold about 73.8 million iPhones from October to December last year. If it is to achieve at least 10% growth, Apple will sell 81 million iPhones within these two.
Is there a wave of iPhone replacement? Is this number too high? Odin cannot estimate. But one thing is certain: the postponement of the iPhone 12 sale means that the mass production date of the iPhone 12 has also been postponed. This means that even if consumers did not buy less because the iPhone 12 missed the shopping season, the iPhone 12 series may still fail to meet the initial sales target due to short supply. Guo Mingchi also admitted in a recent report that the iPhone 12 series may miss part of the peak season demand in Europe and America due to tight supply.
Image source: Jon Prossor
It is understood that the iPhone has always entered mass production in June, but Guo Mingchi revealed in April that the 6.1-inch iPhone 12 will likely enter mass production in September, and the 6.7-inch iPhone 12 Pro Max mass production may be delayed. Until October. The Internet broke the news that the great god Jon Prossor obtained a leaked video at the end of August. It is estimated that it is the iPhone 12 Pro Max in the PVT test phase (above). He even directly stated that mass production will not start until a month later, indirectly proves that the iPhone 12 Max Pro has only recently entered Mass production stage.
At present, as the 6.1-inch iPhone 12/12 Pro has entered mass production in August, there is still no related out-of-stock news so far, and the stock volume is still optimistic. However, the iPhone 12 mini/Pro Max has only recently entered the mass production stage, and the future production capacity is completely unpredictable.
Operating pressure of the supply chain
As of the deadline, we have not yet determined whether Apple has enough production capacity (especially iPhone 12 Pro Max and iPhone 12 mini) to cope with the peak shopping periods of Double 11 and Thanksgiving. In the end, the iPhone’s three-month delay in mass production will put what pressure on Apple’s supply chain?
Suppose last year that iPhone sold more than 10 million units in the first week of September, and about 73.8 million units were sold in the October-December quarter, for a total of about 85 million units. It is known that the iPhone 11 was mass-produced in July last year, when Apple was about to produce an average of more than 14 million iPhones per month within 6 months. But if Apple’s iPhone 12 starts mass production in September and achieves a production capacity of at least 75 million units, then Apple will produce an average of over 18.75 million iPhones per month within these four months.
This means that Apple wants the iPhone sales not to decline this quarter, and the supply chain must be accelerated by at least 33.9%. However, as we all know, the National Day Golden Week in October is often the biggest obstacle to production.
American cargo plane loaded with iPhone 6. Image source: MacRumors
In order to make up for this gap in production capacity, according to sources, Foxconn and Pegatron’s production lines in China also “voluntarily work overtime” during the National Day Golden Week, and even maintain 24-hour uninterrupted production, and there is news that Foxconn and others have dispatched several times overtime. Feilai keeps up with the progress, and the production cost naturally increases substantially. In addition, in the past, Apple has used a large number of costly air freight logistics to catch up with the shopping season. It is estimated that this time Apple will have to significantly increase logistics costs and use air freight again in order to catch up with the delivery.
After all, for the supply chain, Apple’s orders have a huge impact on its performance. Just look at the example of Luxshare Precision. These supply chains have been hit a lot during the epidemic at the beginning of the year, but if iPhone shipments are greatly reduced due to production capacity, performance will inevitably be affected. Ming-Chi Kuo, who is familiar with Apple’s supply chain, has already indicated that the iPhone component shipments in this quarter cannot reflect the true demand for the iPhone, which constitutes an uncertain factor in the future stock price of Apple’s supply chain.
Shock wave to the parts industry
At present, we still don’t know how much impact the postponement of the iPhone will have on Apple’s performance. But for sure,The postponement of iPhone sales will definitely have a huge impact on the surrounding related industries. We must know that although the iPhone business itself is huge, the iPhone-related accessories industry is also very huge. Mobile phone cases, stickers, chargers, charging cables, etc., constitute a mobile phone accessories market worth hundreds of billions of yuan.
iPhone users are more willing to use mobile phone cases than ordinary mobile phone users (2013 data). Image source: NPD
Users are willing to buy expensive iPhones, their consumption power is naturally stronger, and this group of users mostly buy iPhones because of Apple’s refined design, which also makes them pay more attention to the maintenance of mobile phones and related personalized design, thus becoming the most important accessory factory. Love, every time the iPhone launches a new product, it will also be a carnival for the accessories factory. But this time the iPhone is postponed, and may miss the shopping season,Even if Apple itself is not severely affected, the mobile phone accessories industry will be affected to a certain extent.
After all, mobile phone accessories are far cheaper than mobile phones, and many mobile phone accessories are also personalized as a selling point. This just reflects that mobile phone accessories are typical fast-moving consumer goods. When promoting and promoting, they pay more attention to consumers’ irrational shopping impulses. The factor that can effectively motivate users to shop is undoubtedly various shopping festivals full of various discounts and promotional activities.
In the past, users often bought new iPhones one after another between September and October after the iPhone’s launch, and then they would continue to look for compatible accessories until China’s Double 11 and Thanksgiving Day in the United States, where the daily backlog of shopping desires would be liberated , Enjoy shopping. But now the iPhone is postponed to launch less than a month to Double 11, which greatly reduces the number of users who have a new iPhone during Double 11.
If these users have not bought the iPhone 12, it will be more difficult to shop during Double 11. When users buy iPhone after Double 11, even if they still buy mobile phone accessories, when they lose the festive atmosphere and discounts, they will be more rational in shopping, pay more attention to cost performance, and reduce unnecessary repetition Consumption, and affected the business volume of these parts factories.
But for the mobile phone accessories industry, the impact of the iPhone delay does not stop there.
It is not easy to produce accessories
The iPhone postponement, for those accessory manufacturers that have the official certification of Apple’s Made For iPhone, is at most just a small amount of business. But for those small parts factories without official authorization, the impact of the iPhone extension is much more serious. These small factories cannot get the drawings of the new iPhone early because they are not authorized by Apple, so most of them can only buy a real machine to open the mold after the iPhone is released in September, and then hurry up while there is still 1 to 2 months. Production, in order to catch up with the shipment before the peak season.
But after the iPhone was postponed, there was not much time left for small parts factories. If these parts factories are lucky, they can buy the machine to open the mold as soon as possible. It usually takes 8 days to make the mobile phone case. In addition to the logistics and distribution, the time is already very tight, not to mention the design, creativity, etc., production A variety of popular mobile phone cases. What if you can’t buy iPhone 12 in time? The whole shopping season will be yellow. Therefore, before the launch of the iPhone every year, some unauthorized manufacturers use special means to produce mobile phone cases or films earlier.
The iPhone 12 CAD drawings that came out in June of this year, but the authenticity cannot be known.Image source: Guofen District Club via Sohu.com
But this is a risk. Earlier, Odin mentioned that a company called Hard Candy made a bet on the wrong treasure and made a bunch of completely wrong protective cases. The amount of loss is unknown, but if this year’s manufacturer wants to take a risk, the risk is relatively greater: iPhone 12 Changed back to the vertical frame of the iPhone 5, the frame is 2mm less, making the iPhone 12 slightly smaller than the iPhone 11, but the screen of the iPhone 12 Max Pro is slightly larger than that of the iPhone 11. As long as one is not careful, the case and film will also change. Doesn’t fit well.
Even if you are lucky to find a prepared drawing, you still cannot know in time that the iPhone has prepared a phone case that supports MagSafe. At present, we do not know whether third-party iPhone cases and chargers can successfully support MagSafe magnetic charging function in a specific way. But if the iPhone 12 is not postponed, it is estimated that these small manufacturers still have enough time to imitate and “research”, but after the postponement of the iPhone 12, it is impossible for an unlicensed manufacturer to catch up with this new one on Double 11 or Thanksgiving. Aftermarket.
The impact is still difficult to calculate
The iPhone’s postponement coincides with the two major shopping seasons of China’s Double 11 and Thanksgiving Day in the United States, so the impact may be greater than many people think. And the huge iPhone Economy that Apple has formed over the years has caused the radiation energy brought about by this delay to spread from Apple itself to related sales, logistics, and supply chains, and even various small-scale companies attached to the iPhone industry chain. Parts factories will also be affected.
But for now, we still can’t estimate how much impact the iPhone extension will have on the entire industry. The iPhone 12 has not yet been officially shipped, and the iPhone 12 Pro Max has just been mass-produced. We currently cannot estimate whether users will really snap up the new generation of iPhones, and it is not clear whether the iPhone 12 will really be in short supply. The actual impact is still difficult to predict accurately.
But for sure, no matter how much you want to buy iPhone 12 as soon as possible, or if you complain about iPhone 12, the value chain behind this iPhone is far beyond ordinary people’s imagination.