Apple's iPhone Build Plans Have Been Adjusted Down At Susquehanna

Mehdi Hosseini, Apple Inc. AAPL is expected to build fewer iPhone 8 devices than previously expected following meetings with unnamed entities in Taiwan and Korea.

Hosseini commented in a research report that Apple is now planning to build and ship around 100 million iPhone 8 units in the bottom half of 2017, which is lower than the analyst's prior forecast of 110 million to 115 million units.

Hosseini also suggested the new iPhone's BOM (bill of materials) will be around $100 to $200 higher than expected, driven by higher memory and display costs and new potential features such as 3D sensing.

No 'Cohesive Reason'

The analyst stated that the industry contacts he met with were unable to provide any cohesive reason to explain the reduction in iPhone build. As such, the analyst is speculating that the now higher price tag per iPhone unit may explain the lower build forecasts.

As such, Hosseini suggested that Apple could also be cutting back on its build plans to manage procurement. In fact, Apple alone is likely to account for up to 20 percent of total DRAM bit demand and up to 30 percent of NAND bit demand in 2017. By lowering production, Apple could be in a better position to avoid any vulnerability of memory bit supply to demand changes.

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