What Do The Lead Times For Apple's New iPhone SE Tell Us About Demand?

Apple, Inc. AAPL launched its much-awaited budget model iPhone SE earlier this month, and the smartphone is widely expected to give a big volume push to the company's flagship product.

The Apple Analyst: JPMorgan Samik Chatterjee reiterated an Overweight rating on Apple with a $210 price target. 

The Apple Takeaways: The timing of at-home delivery for the iPhone SE 3 has extended across different markets, the analyst noted. The lead times are at 12 days in the U.S., which account for roughly 35% of the total iPhone shipments.

The lead times for the iPhone SE model in the U.S. in 2020 were even longer at 22 days at a similar point in the launch cycle, the analyst said. 

In China, the lead times are at six to eight days, Chatterjee said. China, according to the analyst, is a key market for monitoring potential Android switchers due to the iPhone SE's affordability and 5G capabilities.

Compared to the 2020 SE cycle, lead times are shorter, likely a function of massive logistical challenges the nation faced during the early months of the COVID-19 pandemic in 2020, he said. 

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Delivery at-home lead times in German and the U.K. are at five and six days, respectively, Chatterjee said. Western Europe accounts for roughly 15% of Apple's iPhone shipments, the analyst said. 

"The more modest lead time extension compared with other geographies mirrors the prior iPhone SE launch in Western Europe, which saw lead times increase by a few days between Week 1 and Week 2." 

Overall, lead times have lengthened over the last week, the analyst said.

It is too early to conclude that the new budget iPhone is seeing strong demand, he said: the data has to be taken with a pinch of salt given ongoing shifts in supply and logistics in the background. 

AAPL Price Action: Apple shares were down 0.4% at $163.33 Monday morning. 

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Photo courtesy of Apple.