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Apple (AAPL) to Slash iPhone 7 & 7 Plus Production?
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Per a Japanese publication, Nikkei Asian Review, Apple Inc. (AAPL - Free Report) will cut 10% of the production for iPhone 7 & 7 Plus in the first quarter of 2017, citing data obtained from the suppliers. Last year, Apple trimmed 30% of its production due to excess inventory.
The report further added that scarcity of camera sensors in addition to deceleration in demand for iPhones could be attributed to the cut in production.
Demand for Apple’s flagship offering has been marred by global macroeconomic weakness due to currency volatility and declining commodity prices in some key regions across the globe. Slowing demand is concerning as iPhone alone contributes about 60% (in the fourth quarter) of the company’s total revenue.
Additionally, we need to keep in mind that iPhone is at the core of Apple’s ecosystem strength. The company has also been seeing slowdown in demand from key regions like China, which, if it continues, can significantly impact Apple’s financials going ahead. About 63% of Apple revenues come from International markets. Moreover, competition from newer launched devices like Alphabet’s (GOOGL - Free Report) Pixel phone as well as cheaper smart phones is also emerging a concern.
As a result, Apple is under great pressure to introduce new products. It recently unveiled a refreshed line of Macs. Apple Pay, Apple Watch, Apple Music are some of the new ventures undertaken by the company. Also, revenues from App Store have been growing. Then there is Apple’s autonomous car project. It is also interested in developing technologies such as AI and AR/VR, which are fast emerging as lucrative business opportunities. Apple is also making inroads into emerging markets like India, which is expected to become the second largest smartphone market in the world this year.
However, it will be a mistake to underestimate Apple just yet. Per rumors, Apple is planning to launch iPhone 8 next year on the 10th anniversary of the first iPhone. The new iPhone, reportedly, will have unbelievable features including a glass body, a dual curved edge-to-edge OLED display with a built-in Touch ID sensor, wireless charging and so on. Analysts expect a surge in demand following the launch of the new iPhone, which is already being dubbed as “super cycle”.
At present Apple carries a Zacks Rank #3 (Hold).
In the past one year, Apple shares have generated a return of 9.94% compared with the Zacks Computer Miniindustry’s return of 11.03%.
Better-ranked stocks in the broader tech space include TiVo Corp and Facebook Inc. . While TiVo sports a Zacks Rank #1 (Strong Buy), Facebook carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the trailing four quarters, TiVo and Facebook have yielded positive average earnings surprises of 97.76% and 21.11%, respectively.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Apple (AAPL) to Slash iPhone 7 & 7 Plus Production?
Per a Japanese publication, Nikkei Asian Review, Apple Inc. (AAPL - Free Report) will cut 10% of the production for iPhone 7 & 7 Plus in the first quarter of 2017, citing data obtained from the suppliers. Last year, Apple trimmed 30% of its production due to excess inventory.
The report further added that scarcity of camera sensors in addition to deceleration in demand for iPhones could be attributed to the cut in production.
Demand for Apple’s flagship offering has been marred by global macroeconomic weakness due to currency volatility and declining commodity prices in some key regions across the globe. Slowing demand is concerning as iPhone alone contributes about 60% (in the fourth quarter) of the company’s total revenue.
Additionally, we need to keep in mind that iPhone is at the core of Apple’s ecosystem strength. The company has also been seeing slowdown in demand from key regions like China, which, if it continues, can significantly impact Apple’s financials going ahead. About 63% of Apple revenues come from International markets. Moreover, competition from newer launched devices like Alphabet’s (GOOGL - Free Report) Pixel phone as well as cheaper smart phones is also emerging a concern.
As a result, Apple is under great pressure to introduce new products. It recently unveiled a refreshed line of Macs. Apple Pay, Apple Watch, Apple Music are some of the new ventures undertaken by the company. Also, revenues from App Store have been growing. Then there is Apple’s autonomous car project. It is also interested in developing technologies such as AI and AR/VR, which are fast emerging as lucrative business opportunities. Apple is also making inroads into emerging markets like India, which is expected to become the second largest smartphone market in the world this year.
APPLE INC Price
APPLE INC Price | APPLE INC Quote
However, it will be a mistake to underestimate Apple just yet. Per rumors, Apple is planning to launch iPhone 8 next year on the 10th anniversary of the first iPhone. The new iPhone, reportedly, will have unbelievable features including a glass body, a dual curved edge-to-edge OLED display with a built-in Touch ID sensor, wireless charging and so on. Analysts expect a surge in demand following the launch of the new iPhone, which is already being dubbed as “super cycle”.
At present Apple carries a Zacks Rank #3 (Hold).
In the past one year, Apple shares have generated a return of 9.94% compared with the Zacks Computer Mini industry’s return of 11.03%.
Better-ranked stocks in the broader tech space include TiVo Corp and Facebook Inc. . While TiVo sports a Zacks Rank #1 (Strong Buy), Facebook carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the trailing four quarters, TiVo and Facebook have yielded positive average earnings surprises of 97.76% and 21.11%, respectively.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>