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iPhone X Supply Almost Caught Up To Demand At The End Of The Quarter

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I have been monitoring the iPhone X’s lead-times in five countries (US, Canada, China, Germany and the United Kingdom) since pre-orders were taken and 43 Apple stores in the Dallas, Minneapolis, New York City and Palo Alto areas for the past three weeks to get a read on how well supply is catching up to demand. Given that Apple launched the iPhone 8, 8 Plus and X in 57 countries the company and its suppliers have done a very good job of ramping production. (Note that I own Apple shares and have sold Put options).

Apple’s shares increased 46% in 2017 vs. the S&P 500 up 19% and the NASDAQ’s 28% gain. One reason for Apple’s strength was due to the launch of the iPhone X especially since it had a starting price of $999.

The company’s quarter ended yesterday, Saturday, December 30th. Understanding how the X is doing should be critical on how the stock performs in 2018.

History of iPhone X availability on Apple’s US website

Since the iPhone X was launched later than the normal end of September timeframe I believe Apple and its suppliers have done a very good job ramping production. The X’s lead-times started off at 5 to 6 weeks but as of last night it was showing In-stock on Apple’s Canada and China websites and 4 days in the US. Germany and United Kingdom sites are at 5 days. Here is a history of the X’s lead-times on its US site.

  • On Friday, October 27th, the first day that orders were taken for the X, its lead-time was 5 to 6 weeks
  • A week later on Friday, November 3, when it first started shipping the X’s lead-time had fallen to 3 to 4 weeks
  • It only took 1 1/2 weeks after first selling (November 15th) for the lead-time to drop to 2 to 3 weeks
  • After just under a total of 3 weeks (November 23rd) it was at 1 to 2 weeks
  • It yo-yoed between 1 to 2 and 2 to 3 weeks for a couple of weeks and
  • Settled at just over a week around December 4th
  • It stayed there until Saturday, December 8th, when it dropped to 4 to 6 days
  • It fell to 2 to 4 days on Monday, December 11th, for most configurations
  • And then down to 2 days on Wednesday, December 13th
  • It stayed between 2 and 4 days for the next two weeks
  • Until it hit 1 day on Thursday, December 28th
  • But it has risen to 4 days on Saturday, December 30th, the last day of the quarter

It is a bit interesting to see the lead-times for the X on Apple’s US website move back and forth a bit. On the company’s Canada and China sites the X’s lead-times have shown in stock for the past two weeks. The Germany and Great Britain sites have ranged from 2 to 7 days and are currently at 5 days. I’ve also checked France which is at 10 days and Japan is at 4 days.

In-store pick-up has improved dramatically

I have been tracking the X’s availability in 43 Apple stores in the Dallas, Minneapolis, New York City and Palo Alto areas since December 9th to get a read on how well supply is catching up to demand. By entering these cities zip codes it shows which stores have stock in the various carrier, color and memory size configurations but not how many. This provides 688 data points that give an indication on how well supply is catching up to demand.

  • Saturday, December 9: 40% of the 688 configurations were available
  • Sunday, December 10: 29% at the end of the weekend
  • Tuesday, December 12: 20% was the low point for the week
  • Thursday, December 14: 52% was the first time it had crossed 50%
  • Saturday, December 16: 51% was only a small decrease
  • Sunday, December 17: 42% after another weekend of holiday shopping
  • Wednesday, December 20: Hit 51%
  • Monday, December 25: Rocketed to 96%
  • Has stayed above 96% reaching 98% on Saturday

While the stocking levels are unknown it looks like the stores have enough on hand or receive large enough quantities to maintain inventory during the day to satisfy walk in customers. Seeing such high coverage is important since if there was low inventory in the stores or long lead times on Apple’s Internet sites it would mean that March quarter sales would be higher. When the lead-times for the various countries all get down to in stock and the US stores have 100% coverage it should indicate that supply has caught up to demand.