JPMorgan Cuts Q4 Shipment Forecast For iPhone

With production delays expected to hurt the launch of the OLED version of the iPhone, JPMorgan has moved to lower its forecast for Apple’s iPhone shipments during the fourth quarter.

According to a research report issued to clients covered by StreetInsider, JPMorgan analyst Rod Hall now thinks Apple will ship 42.2 million iPhones during the fourth quarter, down from 49.5 million. The analyst did note the production snafus have been known for awhile now and won’t affect the stock price. JPMorgan is forecasting that Apple will sell 2 million iPhone Pro units in September, lower than past expectations for 9 million units sold.  For full-year 2018 JPMorgan raised its shipment estimate to 270.2 million from 262.9 million units.  The Wall Street firm, which has a overweight rating on Apple, said the average selling price for the OLED iPhone is expected to increase by $100 to $1,100 because of higher-than-exxpected production costs.

Earlier this week a report surfaced that the iPhone 8 could be delayed until November or December due to low yield rates at its two main original design manufacturers (ODMs). According to DigiTimes, which cited Economic Daily News, the two ODMs for the upcoming iPhones — Foxconn Electronics and Pegatron — have not reached production levels that would result in mass production of the organic light-emitting diode (OLED) phone. The news comes amid other stories indicating production of the new iPhone 8 had already started. The report noted Foxconn has around 95 percent of orders for the OLED model as well as small-volume orders for the 4.7- and 5.5-inch iPhone models. Meanwhile, Pegatron is producing 65 percent of the 4.7-inch iPhone 7s and a small amount of the OLED phone. Taiwan-based design manufacturer Wistron will manufacture the 5.5-inch model. Volume production of the models is expected to be in full swing in August, one to two months past previous mass production schedules on new iPhone devices, noted the report.