Can Apple Supply Enough iPhone 8s To Avoid Bottlenecks? That Remains To Be Seen

Oppenheimer analyst Andrew Uerkwitz rates Apple Inc. AAPL at Perform and said the company may not have enough new iPhone 8 devices initially to meet pent-up demand.

“However, it may be time to ask, ‘What's next?’ Here, we believe the lack of differentiation and innovation is chipping away its market dominance and should be viewed as a sign of weaker control on its relationship with users,” Uerkwitz wrote.

Analysts conducted a series of meetings with company officials in China and Taiwan that focused on the smartphone supply chain.

Possible Bottlenecks A Question

“There was general consensus among our conversations that confirms our thesis that Apple's dwindling market share in Greater China is due to the lack of compelling differentiation among hardware and software,” Uerkwitz said. “The mobile user experience in China is heavily dictated by Tencent and other local Internet companies, making Apple's software and services ineffective as key differentiators.”

“That said, we do believe there is pent-up demand for iPhone 8, which is widely reported to make a few major design changes. We expect a temporary rebound in share. The key question, whether Apple can supply enough iPhone 8 without major bottlenecks in the supply chain, remains unanswered.”

Apple closed at $153.80 on Tuesday, down just a few cents.

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