Deutsche Bank Sees Risk Of Apple iPhone's 'Sharp Production Cuts'
Deutsche Bank issued an industry update Tuesday and forecasted a “risk of sharp production cuts” for the 5.5-inch Apple Inc. (NASDAQ: AAPL) iPhone 6 in the first quarter of 2015.
Analysts Yasuo Nakane and Kenichi Saita noted that “The biggest changes in our outlook since late October are for components and production in 1Q 2015, especially regarding weaknesses for 5.5" panels.
“We raise our assumption for combined 4.7"+5.5" production of end-use products from 66m to 68m for 4Q 2014 but lower it from 49m to 35-38m (down 44-49 percent QoQ) for 1Q 2015.”
Nakane commented, “Given the current consensus for 5.5" production to stay high in 1Q 2015 while the slowdown is less than usual for iPhone 6 overall, the market may view developments negatively if our assumptions for trends are correct.
“For final demand, there are many uncertainties regarding year-end sales campaigns in Europe and the US and Chinese New Year sales campaigns in Asia and greater China. However, signs of weak product and related component supply after January may be seen in production volumes through 4Q 2014 (or January 2015), suggesting that peak demand will be about at the same time, in line with our forecast.”
Nakane concluded that “production adjustments in 1Q 2015 like those seen last year and two years ago would suggest that demand is not as strong as the buzz in the market and the media portray it and that the consensus is overly optimistic.”
Apple traded at $113.18 shortly after the opening bell, down 1.6 percent
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