February sales were generally weaker. Except for fewer working days, the shortfall from Largan primarily reflected sluggish iPhone 5 shipments; the weakness at Wintek was due to softer demand on Apple legacy products including iPad 4 and iPhone 4S; the softness at Ichia reflected model transitions (i.e., Blackberry) on top of labor supply shortage.
iPhone 5 Total builds were lowered to 21-22mn units in 1Q13 vs. the prior plan of 23-25mn units a month ago. Next iPhone model is scheduled for trial production in May/June and likely ramp in July/August.
iPad 4 sell-in stayed on track at 6-7mn units in 1Q, while iPad mini appeared to slow post strong stocking since the launch. Model transition
impact should drag iPhone/iPad run rate down 10-20% QoQ in 2Q as new models are due to debut in early 3Q.; iPad mini run rate will likely slow after March following the strong builds since last November.
iPad mini Total shipments in 1Q should stay steady at 12-13mn units. However, they could decline by 20% QoQ in 2Q. The refreshed iPad mini model will not debut until late 3Q.
The supply chain indicated Galaxy Note 2 sell-in momentum held up well into March vs. the downward trend in S3 ahead of the S4 launch.
The supply chain suggested the sell-in momentum for new HTC One appeared to turn softer than expected in March and into 2Q due to rising concerns of component shortages. (e.g., VCM & casing).
Blackberry: Z10 sell-in seemed to hold up in February into March; overall 1Q shipments could reach 3-3.5mn units. Q10 ramp might be pushed back to 2Q from March on component constraints.