KeyBanc Survey: iPhone BOGO Promos Have Limited Inventory Effect

Loading...
Loading...

Apple Inc. AAPL introduced a buy-one-get-one-free promotion earlier this year for its iPhone devices, including the high-end iPhone X. The promotions have had a "limited impact" on lowering iPhone inventories, according to KeyBanc Capital Markets.

The Analyst

KeyBanc Capital Markets' John Vinh.

The Thesis

Apple's iPhone inventories declined month-over-month in February, but days of inventory remained flat month-over-month at around five days, according to a KeyBanc carrier survey.

Stores that sell iPhones found that sell-through of the iPhone 8 was "slightly better than expected, but sell-through for the iPhone X was "disappointing," Vinh said. 

Stores cited the high cost of the iPhone X, which retails for $300 more than the iPhone 8, as a headwind and also said they saw a "significant reduction" in the number of iPhone X shipments received, the analyst said. 

Apple could face a "moderate risk" of an inventory correction, as iPhone inventories remain elevated versus prior cycles but are still under the targeted six-to-10 day range, according to KeyBanc. 

Even a moderate risk implies "limited near-term catalysts" for the Apple supply chain, Vinh said. But over the longer term, the analyst continues to recommend investors own three companies in Apple's supply chain:

  • Broadcom Ltd AVGO
  • Skyworks Solutions Inc SWKS
  • Synaptics, Incorporated SYN

Price Action

Apple shares were up 1.72 percent at the close Friday at $179.98.

Loading...
Loading...

Related Links:

BofA: Should Apple Cut iPhone Prices This Year?

Raymond James Lays Out 3 Reasons To To Stay On Apple's Sidelines... For Now

Photo courtesy of Apple. 

Loading...
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorCrowdsourcingAnalyst RatingsGeneralApple Supply ChainiPhoneiPhone InventoriesiPhone XJohn VinhKeyBanc Capital Markets
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...