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.