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Apple’s Cyber Monday Lead Times Show Supply Remains Tight

Apple’s Cyber Monday Lead Times Show Supply Remains Tight

Entering Black Friday we observed lead times at Apple for ten products in six countries that suggested the gap between demand and supply is slightly wider than what we would have anticipated given company commentary on the September earnings call. We revisited the lead times on Cyber Monday and found that while there were slight changes, the supply environment remains tight. What’s most important is demand for both Apple’s newest and previous generation products is strong, and to the extent the December quarter is negatively impacted from greater-than-expected supply chain bottlenecks, the March quarter will have a corresponding positive impact.

Promotions mirror 2020

Apple discounts a handful of its products once a year, from Black Friday through Cyber Monday. This year the level of promotions is similar to 2020 levels, with about 15 products eligible for an Apple in-store credit with purchases. Not surprisingly, Apple is not offering any incentives for the products that are most in demand, including Watch Series 7 and iPad Mini.

Lead times in six countries continue to show tight supply

  • Typical lead times for new Apple products going into Cyber Monday are on average about 10 days.
  • Apple’s guidance calling for an $8B supply chain headwind in December would imply lead times entering Cyber Monday should be an average of 16 days.
  • Today, Apple is quoting an average of 18 days for seven new Apple product SKUs in 6 countries. That is a slight improvement from 20 days we observed last week.
  • New iPads remain in the tightest supply, with new model lead times averaging 39 days. This is a slight improvement from 40 days we observed last week. iPad accounts for about 9% of the December quarter revenue.
  • iPhones 13 are running with an average delivery time of 8 days. That is a slight improvement from 9 days we observed last week. iPhone accounts for just under 60% of the December quarter revenue.
  • The new Watch showed the biggest improvement in supply and is running with an average delivery time of 13 days, down from 24 days last week. Watch accounts for just over 5% of the December quarter revenue.
  • Average lead times for previous generation products were 8 days, compared to typical same-day availability.

Three takeaways

  • As expected, Apple can’t keep up with demand. Most of the lost demand in December will be captured in March.
  • If that 4-day lead time gap continues for the balance of the quarter, it would increase the supply chain effect in December to about $10B, compared to guidance of $8B.  The $2B delta is just under 2% of the Street’s $117B holiday quarter revenue estimate.
  • We caution, it’s two days of data points that will evolve throughout the quarter.

Disclaimer

Apple
2 min. read Show less
2021 Loup Holiday Gift Guide

2021 Loup Holiday Gift Guide

Last year, we predicted a few items for this year’s gift guide:

  • AirTags | $29 | Apple’s network-driven approach to tracking your stuff.
  • AirPods Studio [AirPods Max] | $549 | The ultimate AirPods listening experience.
  • Tickets to Broadway | $29+ | Broadway is open for business!

Here’s what else is on our list:

And here’s a look ahead to 2022 and some of the products we’re hoping for:

  • Nintendo 64 Classic Edition | Can’t wait!
  • Quest 3 | New VR hardware from Meta.
  • Peloton Strength Machine | Peloton’s new Guide has us hoping for more.

Disclaimer

Apple, Autonomous Vehicles, Blockchain, Cryptocurrency, Facebook, Gaming, Retail, Tesla, Twitter
1 min. read Show less
Apple Demand High, Supply Tight Entering Holiday Buying Window

Apple Demand High, Supply Tight Entering Holiday Buying Window

It’s no surprise that heading into Black Friday we found demand for Apple’s products outpacing supply. More notably, a snapshot shows the gap between demand and supply is slightly wider than what we would have anticipated given company commentary on the September earnings call. In the end, what’s most important is demand for both Apple’s newest and previous generation products is strong, and to the extent the December quarter is negatively impacted from greater than expected supply chain bottlenecks, the March quarter will have a corresponding positive impact.

Snapshot: Lead times in six countries greater than expected

  • Typical lead times for new Apple products going into Black Friday are on average about 10 days.
  • Apple’s guidance calling for an $8B supply chain headwind in December would imply lead times entering Black Friday should be an average of 16 days.
  • Today, Apple is quoting an average of 20 days for seven new Apple product SKUs in 6 countries.
  • New iPads are in the tightest supply, with new model lead times averaging 40 days. iPad accounts for about 9% of the December quarter revenue.
  • iPhones 13 are running with an average delivery time of 9 days. iPhone accounts for just under 60% of the December quarter revenue.
  • The new Watch is running with an average delivery time of 24 days. Watch accounts for just over 5% of the December quarter revenue.
  • Average lead times for previous generation products were 8 days, compared to typical same-day availability.

Three takeaways

  • As expected, Apple can’t keep up with demand. Most of the lost demand in December will be captured in March.
  • If that 4-day lead time gap continues for the balance of the quarter, it would increase the supply chain effect in December to about $10B, compared to guidance of $8B.  The $2B delta is just under 2% of the Street’s $117B holiday quarter revenue estimate.
  • We caution, it’s one day of data points that will evolve throughout the quarter.
  • If you want to give the gift of an iPad, you’ve missed the online window and need to head to a store. If you want to give the gift of a Watch, you’ll likely have to purchase it before the end of November.

Disclaimer

Apple
2 min. read Show less