Maynard Um says rocky iPhone 6 launch doesn't mean sales aren't there
In a note to investors Mr. Um said,
While difficult to track model and size demand due to the online store difficulties, one general observation is that iPhone 6 Plus appeared to have experienced extended lead times first (7-10 days for various models) though it's unclear whether this was a function of demand or limited quantities relative to the iPhone 6. If the iPhone 6 Plus has higher gross margins than the iPhone 6 (under the presumption that there isn't $100 increase in BoM from the 6 to the 6 plus for the same size configuration) and if extended shipping times are a reflection of true demand (and not inventory availability), it would suggest mix should benefit Apple though we surmise inventory may have played some part.
The difficulties Mr. Um referenced started immediately with customers unable to access Apple's online store via Web browser or through the iPhone and iPad Apple Store app. AT&T, Verizon, and Sprint had issues keeping their online stores running, too, and T-Mobile wasn't even offering pre-orders at the time. Shoppers tended to have more luck pre-ordering through the iOS app, but even then often had issues completing their order.
“The overall launch was generally not a smooth experience but may be a reflection of general demand,” he said. “We expect Apple to sell as many iPhones as it can make into launch.”
Mr. Um expects early adopters will continue to favor the iPhone 6 Plus, but over time sales will shift more towards the smaller screen iPhone 6.
The iPhone 6 and iPhone 6 Plus were introduced earlier this week at a special media event along with the highly anticipated Apple Watch. The iPhone 6 comes with a 4.7-inch display, and the iPhone 6 Plus sports a 5.5-inch display. Both include Apple's own A8 processor and M8 motion co-processor, better graphics performance, 802.11ac WiFi, NFC, 8MP camera with improved image sensor, thinner bodies compared to the iPhone 5S, improved battery life, and more. Pricing starts at $199.
Mr. Um is maintaining his “Market Perform” rating and target price range between $89 and $99 for Apple's stock. Apple closed on Friday at $101.66, up 0.23 (0.23%), but is down 0.06% in after hours trading at $101.60.