Mizuho's analysts lowered Apple's (NASDAQ:AAPL) iPhone estimates for 2024 and now expects a 7% drop to 217 million units, versus its prior outlook of a 6% drop.
Analysts believe that Apple will have to lower iPhone production during the first half of the year more than the usual seasonality to avoid supply chain bottlenecks.
Analysts now estimate Q1 production at 46 million units (-21% Y/Y, -45% Q/Q) and Q2 production of 46 million (+18% YoY / flat QoQ), putting 1st-half output at 92 million units.
"We see somewhat negative short-term implications from an ongoing drop in production," analysts commented. "We think the Apr–Jun quarter will be especially negative for both Apple and value chain suppliers (with 1H FY3/25 guidance risk for Japanese firms)."
While the short term looks negative, analysts see hope for the back half of the year on prospects for the upcoming iPhone 16 and AI functionality.
"... see the potential for improving momentum from the latter half of 2Q, partly in light of Apple’s bullish outlook on the iPhone16 and prospects for enhanced AI functionality," analysts said. "Subsequent focus points are likely to include iPhone16 features, prices, and sales, as well as the prospect of a return to positive growth for production and sales in 2025 driven by the SE4 and the iPhone17."