In the hot summer of July, apple held a conference call on the third quarter of 2020 earnings. Luca Maestri, Apple's chief financial officer, admitted that the launch of the new iPhone had to be postponed. As a result, the iPhone 12 will not be officially released until mid October, and then it will not be delivered until October 23, while the iPhone 12 mini and iPhone 12 Pro Max will not be shipped until November 13.
If you are just an ordinary consumer, maybe iPhone postponed the sale, just to let you buy your mind later; if you are a Android fan, perhaps you will feel no more, and will only make complaints about this new iPhone Tucao. But you may not have thought about the impact of the iPhone extension to November on the industry as a whole.
November is the beginning of the shopping season in China and the United States.
Analysis from the point of time
To be sure, this is not the first time the iPhone has been delayed. Since 2007, Apple has chosen to launch a new generation of iPhone in June for many years. Until 2011, the iPhone 4S was postponed to October. Then, starting in 2012, Apple launched a new generation of products (in addition to the 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 time that the iPhone has been postponed, why does this delay have an impact on apple and even the industry? The reason is that even though the delivery of the iPhone has been delayed several times, it has not been possible for years to wait until the end of October like the iPhone 12 (above). What's more, the lowest and highest selling price of the iPhone 12 series, the iPhone 12 mini and the iPhone 12 Pro max, will not be available until mid November.
Previously, Odin had mentioned when analyzing Apple's Q3 results that Apple's performance in the fourth quarter of 2020 (July to September) is likely to be affected due to the delay in the iPhone launch date. But I didn't expect that Apple would eventually postpone the delivery date to the end of October, and some core products would not be available until November. As a result, Apple will also lose a whole month's iPhone revenue in the first quarter of 2021 (that is, from October to December 2020).
In 2017, although Apple launched the iPhone 8, the iPhone x will not be available until October; in 2018, Apple will launch the iPhone XS, but the iPhone XR will also be 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 December 2017) and the first quarter of 2019 (October December 2018) showed a year-on-year decline.
The iPhone 12 is late this time, and it happens 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 the year, and one quarter's performance has accounted for more than 30% of the whole year. In addition, since 2015, iPhone has accounted for 60% of the revenue of the quarter. Imagine that iPhone revenue in a single quarter has exceeded $50 billion, more than twice the full year revenue of Qualcomm in 2019. So in the past three months, Apple has made 20% of its annual revenue from selling iPhones alone.
IPhone's first quarter performance and its impact on Apple's full year performance
Since Apple's first week of iPhone sales in the fourth quarter (July to September) will be moved to the first quarter, this will bring some compensation for Apple's first quarter performance in 2021 to some extent. But digitime still expects apple to sell 63million to 68 million iPhones due to the delay. Apple sold 73.8 million iPhones in October December 2019, according to IDC data, which means that the delay will cause sales to fall 8% - 14% year-on-year.
Chasing double 11 and Thanksgiving
Although the iPhone 12 and 12 Pro can barely catch up with the double 11, the cheap iPhone 12 mini and the flagship iPhone 12 Pro Max can catch up with thanksgiving in the United States, shouldn't it be too bad? Guo Mingji, a famous apple analyst, 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, early shipment of iPhone 12 is believed to reduce the loss caused by Apple's delayed shipment.
Image source: mixpanel
According to the data analysis website mixpanel, after the launch of iPhone 11 in 2019, the entry-level iPhone 11 accounted for 46% of the total flow of new iPhones at the end of that year, accounting for more than 75% of the total traffic of the flagship iPhone 11 Max pro (above).
In 2018, the iPhone XS series, even though the entry-level iPhone XR was delayed, still accounted for 30.8% at the end of the year. Together with the high-end iPhone XS max, it accounted for more than 60% of the new iPhone market flow.
In addition, the iPhone 12 mini and pro Max can barely catch up with the Thanksgiving season in the United States, but the rush delivery time may also affect Apple's distribution arrangement. After all, at present, the epidemic situation in the United States is still serious, and the global logistics and freight transportation system is not as flexible and fast as ever. It is still a great challenge for apple to deliver a large number of iPhones to channels or express them directly to users who have already purchased in advance, which has disrupted the distribution and deployment of iPhone sales channels.
In addition to relying on the iPhone 5g sales channel in the United States, apple is also looking forward to the sales channel of iPhone 5g. 5g coverage in the United States has been limited by the spectrum, and it is difficult to expand rapidly. Some analysts pointed out that operators also expect the early launch of 5g iPhone, so that they can attract more users to choose 5g packages, so as to accelerate the development of 5g in the United States.
At present, we can't know exactly how much impact the delay will bring to 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 quarter, as long as the capacity is enough, it can still make up for it in the next quarter. The prerequisite is that iPhone capacity must be adequate.
IPhone 12 capacity issues
Don't get me wrong, this is not to say that the iPhone 12 is not wanted. Even if the iPhone 12 is delayed, considering that this year is Apple's transition from 4G to 5g, the financial sector generally believes that the iPhone 12 will bring about a wave of phone changes in the new quarter, and even achieve double-digit sales growth. According to IDC, Apple sold about 73.8 million iPhones from October to December last year. If it wants to achieve at least 10% growth, Apple will sell 81 million iPhones in these two areas.
Is there a wave of iPhone changes? Is the number too high? Odin cannot estimate. But one thing is certain: the iPhone 12 is delayed, which means the iPhone 12's mass production date is also delayed.
This means that even if consumers don't buy less because the iPhone 12 missed the shopping season, the iPhone 12 series may still be unable to meet its initial sales target because of the shortage of supply. Guo also admitted in a recent report that the iPhone 12 series may miss some of the peak season demand in Europe and the United States due to tight supply at the early stage of the launch.
Image source: Jon prossor
It is understood that the iPhone has always been in mass production in June, but Guo has disclosed in April that the 6.1-inch iPhone 12 may enter mass production in September, and the production time of the 6.7-inch iPhone 12 Pro Max may be postponed to October. According to the online news that Jon prossor obtained the leaked video at the end of August, it is estimated that it is the iPhone 12 Pro Max in the PVT Test Stage (above). He directly said that the mass production of the iPhone 12 Max Pro would not start until one month later, indirectly proving that the iPhone 12 Max Pro has only entered the mass production stage recently.
Currently, the 6.1-inch iPhone 12 / 12 Pro has entered mass production in August, so far there is no stock out information, so the stock preparation is still optimistic. However, the iPhone 12 Mini / Pro Max has just entered the mass production stage recently, and the future production capacity is completely unpredictable.
Management pressure of supply chain
As of the deadline, we are not sure whether Apple has enough capacity (especially the iPhone 12 Pro Max and iPhone 12 mini) to cope with the shopping peak of double 11 and Thanksgiving. What kind of pressure will be put on Apple's supply chain if the iPhone is delayed for three months before mass production?
Let's say that last year, the iPhone sold more than 10 million units in the first week of September, and about 73.8 million units in the first quarter from October to December, a total of about 85 million units. It is known that the iPhone 11 was in mass production in July last year, when Apple had to produce an average of more than 14 million iPhones a month in six months. But if Apple's iPhone 12 doesn't start mass production until September, with a capacity of at least 75 million units, Apple will produce an average of more than 18.75 million iPhones a month in the four months.
This means that Apple wants iPhone sales not to decline this quarter, and the supply chain needs to speed up at least 33.9%. But as we all know, October's National Day golden week is often the biggest obstacle to production.
American freighter loaded with iPhone 6. Source: macrumors
After all, for the supply chain, Apple's orders have a huge impact on its performance. Take a look at the example of lichen precision. These supply chains have suffered a lot during the outbreak at the beginning of the year, but if the iPhone shipment volume is greatly reduced due to production capacity, the performance will inevitably be affected. Guo Mingji, who is familiar with Apple's supply chain, has already indicated that the iPhone parts shipment volume in this quarter is difficult to reflect the real demand for iPhone, which constitutes an uncertain factor for the future share price of Apple's supply chain.
Shock wave to accessory industry
For now, we don't know exactly how much impact the iPhone delay will have on Apple's performance. But it is certain that the postponement of the iPhone sale will certainly have a huge impact on the surrounding related industries. You should know that although the iPhone business itself is huge, the iPhone related accessories industry is also very huge. Mobile phone case, film, charger, charging line and so on constitute the market of mobile phone accessories worth 100 billion yuan.
IPhone users are more likely to use the case than the average mobile phone user (2013 data). Image source: NPD
Users are willing to buy expensive iPhones, so they naturally have a strong spending power. Moreover, most of these users buy iPhones because of Apple's refined design, which also makes them pay more attention to the maintenance of mobile phones and the related personalized appearance design. Therefore, they become the favorite of accessory factories. Every time an iPhone launches a new product, it will be a carnival for the accessory factory. But this time the iPhone is delayed and may miss the shopping season. Even if Apple itself is not seriously affected, the mobile 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 also take personalization as the selling point, which just reflects that mobile phone accessories are typical FMCG products, and consumers' irrational shopping impulse is paid more attention to when promoting sales. Undoubtedly, various shopping festivals full of various discounts and promotional activities can effectively promote users' shopping impulse.
In the past, users often bought new iPhones one after another during the period from September to October after the launch of the iPhone, and then they would continue to look for suitable accessories. Until the double 11 in China and Thanksgiving in the United States, the daily backlog of shopping desire will be liberated and they can enjoy shopping. But now the launch of the iPhone has been delayed to less than a month, greatly reducing the number of users who have new iPhones during the double-11 period.
If these users haven't bought the iPhone 12, it's even harder to have impulse shopping during the double 11. When users buy iPhones after the double 11, even if they still buy mobile phone accessories, when they lose the holiday atmosphere and discount, their shopping behavior will be more rational, pay more attention to cost performance, reduce unnecessary repeated consumption, and affect the business volume of these accessory factories.
But for the mobile accessories industry, the impact of the iPhone delay is not just that.
It's harder to make accessories
The iPhone delay, for those who have the official certification of apple made for iPhone accessories manufacturers, at best, is just a small amount of business. But for small parts factories that don't have an official license, the impact of the iPhone delay is much worse. These small factories can't get the drawings of new iPhones in advance because they don't have Apple's authorization. So most of them can only buy a real machine to open the mold after the iPhone is released in September, and then make production quickly in 1-2 months, so as to catch up with the shipment before the peak season.
But after the iPhone's delay, there's not much time left for small accessory factories. If these parts factories are lucky, they can buy machines to open models as soon as possible. It takes 8 days to make mobile phone cases. In addition, with logistics and distribution, the time is already quite tight, not to mention design, creativity, etc. to produce various popular mobile phone cases. What if you can't get the iPhone 12 in time? The whole shopping season is going to be yellow. Therefore, before the launch of iPhone every year, some non authorized manufacturers use special means to produce the case or film ahead of time.
The iPhone 12 CAD drawings were released in June this year, but the authenticity is not known. Photo source: via sohu.com
But there is a risk to be taken. Previously, Odin once mentioned that a manufacturer named hard candy made a wrong bet and made a pile of completely wrong protective cases. It is not known how much the loss will be. However, if manufacturers want to take risks this year, the risk is relatively greater: the iPhone 12 changes back to the vertical border of the iPhone 5, and the border is 2mm less, which makes the volume of the iPhone 12 slightly smaller than that of the iPhone 11, but the screen of the iPhone 12 Max Pro is smaller than that of the iPhone 11 The iPhone 11 is a little bigger, and if you don't pay attention to it, the case and the film don't fit.
The impact is still difficult to calculate
The delay of the iPhone coincides with China's double 11 shopping season and the U.S. Thanksgiving shopping season, so the impact may be greater than many people think. The huge iPhone economy formed by apple for many years will spread the radiation energy brought by this delay from Apple itself to the related sales, logistics and supply chains, and even the small parts factories attached to the iPhone industry chain.
But for now, we still can't estimate how much impact this iPhone delay will have on the entire industry. The iPhone 12 has not yet been officially shipped, while the iPhone 12 Pro Max has just been put into mass production. We can't estimate whether users will really rush to buy a new generation of iPhones, and it is not clear whether the iPhone 12 will be in short supply. The actual impact is still difficult to predict accurately.
But it is certain that no matter how fast you want to buy iPhone 12 or make complaints about iPhone 12, it is not new, but the value chain behind this iPhone is far beyond the average imagination.