Now that the much-awaited iPhone 5 has been launched, we wanted to investigate what impact it would have on the supply chain that feeds the behemoth, and how it will affect manufacturing cycles and other related industries.
Investment bank Goldman Sachs (GS) is expecting (as per a 13 September company update report on Apple) the new iPhone 5 and iOS 6 to serve as a powerful driver of earnings upside in the December quarter and into 2013. For FY2013, GS forecasts iPhone units of 165.3 million on total revenues of US$186.41 billion. For FY2014, GS estimates increase to revenues of US$223.81 billion and units of 221.4 million.
As far as China goes, GS believes the "iPhone5 launch could drive another spec upgrade cycle for the smartphone industry, and an earnings driver to related supply chain names such as acoustic vendor, GoerTek". According to Goldman Sachs' Equity Research report dated 13 September, the newly launched map service could also be positive news for AutoNavi.
GS identified the following subsector implications from the early shipment schedule of the iPhone 5:
(1) A boost to utilisation and revenues at component makers in October-December;
(2) Mixed impact for telecom stocks; and
(3) No prospect for supply/demand improvement for NAND stocks given the iPhone 5 capacity is unchanged from 4S.
GS said (in a report dated 13 September) that their smartphone supply chain channel checks indicated that "Apple-related component orders may increase meaningfully from October suggesting that traditional seasonal patterns may not be valid this year." This means that Q4 2012 could be stronger than Q3 2012 for some component makers.
Companies (they believe) that are in the Apple foodchain are Samsung Electronics, Hynix Semiconductor, LG Display, LG Innotek, Samsung SDI, LG Chem, Semco, Interflex, and Amotech.
"Apple's decision to keep NAND densities unchanged was expected but at the same time a continuing challenge for the NAND industry," said a GS analyst in the report. "We also expect Apple to continue to diversify memory supply towards smaller makers as has been the trend since 2H11 [second half of 2011]."
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