End of year greetings from Davidson/ Lake Norman, NC. There is no Sunday Brief this week, but today we will publish the latest iPhone 12 Pro and 12 Pro Max availability through this morning (7 a.m. ET), and will publish the market cap changes tomorrow (with perhaps a thought or two in the C-Band auction’s nosebleed heights)
Here’s the iPhone 12 Pro chart by carrier/ memory size/ color:
Supply constraints got 1-2 weeks worse for all carriers. The availability of the iPhone 12 Pro at Verizon has vanished over December (this likely has more to do with relative lack of promotions for this model than COVID or any other trend). Gold will have to wait for Valentine’s Day (or later). Remember this as you read the reports of inventory/ supply constraints – there would be no shortages 10 weeks after launch is demand weren’t significantly above expectations.
We clearly expect this to have a mile impact on T-Mobile’s gross additions and AT&T’s EBITDA levels (due to offering the same trade-in and cash incentives to their existing base). Both the carriers and Apple missed the demand level for the 512 GB version (which, in our opinion, likely has more to do with embedded base upgrades more than switchers). We predict that the iPhone 12 Pro shortages will be used as an excuse for gross add misses for at least two of the three carriers (and perhaps cable?).
The “gotta have something under the tree” psychology did not really carry over into the iPhone 12 Pro Max as the chart below shows:
Clearly, Verizon is doing something with their promotions here (or Verizon customers have a different psyche than their wireless peers. AT&T and T-Mobile are pretty much back to standard availability (an occasional color out of stock which oftentimes is quickly remedied), but Verizon either ran tight on their initial iPhone 12 Pro Max orders (unlikely), or is using stores and online to aggressively upsell (or, in Verizon service plan language, “price up”). Our guess is that it’s the latter, and perhaps they are seeing slightly greater enterprise orders than AT&T.
Unfortunately, we will likely have to have at least one more iPhone 12 Pro look next week. The real winner here is Apple – minimal trade-in promotions, minimal store activity, limited Apple Card usage with a lot of volume. Should be a cash register quarter for Cupertino.