Do not Panic. AAPL’s iPhone 14 sales still on track

$Apple(AAPL)$Bloomberg reported on Apple’s pull-back on production increase for the iPhone 14 family products yesterday. This is due to the lacklustre demand for the standard iPhone 14 and iPhone 14 plus model. However, all these are old news which I have shared a few times before in my previous posts. Only the “production boost” is being scaled down, the 90mil handset sales target remains intact, which is similar to its predecessor iPhone 13 when it first launched. The market overreacted and sold down Apple share price.

Also, another positive news that Bloomberg reported but was drowned by all the noises: the premium iPhone 14 Pro and iPhone 14 Pro max demand is very strong! The demand is even stronger than iPhone 13 Pro series when it first launched last year. This is something which I shared repeatedly as well. Based on Apple’s EMS provider, Foxconn, the product mix weighting is shifting more towards the Pro and Pro max models, which typically will have a higher gross profit margin. Assuming the same 90mil handset sales, the ASP for the whole iPhone 14 products will increase, along with an improvement in margins. All these are good news for Apple, which the market missed and only focused on the “bad news” on the headline.

This is why it is important to ignore “noises” such as this Bloomberg report and check the facts yourself. Trends of premiumization is evident in both iPhone and Apple Watch, despite this weak macro backdrop. The good thing about Apple is that many of its suppliers are listed companies, such as Foxconn, Pegatron, Largan, Samsung Display etc., and you can check the supply chain to double confirm. Personally, I’m bullish on Apple’s outlook and I’ll be happy if AAPL share price overcorrects in the next few weeks.

@TigerStars@Daily_Discussion