iPhone 12 Demand Linked to Increased Air Pollution in China
Morgan Stanley analysts led by Katy Huberty used tracked air quality data from cities such as Zhengzhou, which is a major production location for Apple, to aid iPhone 12 sales projections.
Using air quality data from a non-profit platform that collects and publishes air quality data in China, we track nitrogen dioxide levels (controlling for temperature, humidity, wind, etc.), which, according to the European Space Agency, is a first-level indicator of industrial activity, in four Chinese cities where Apple's manufacturing partners have a large manufacturing presence.
As of October 26th, air quality data from Zhengzhou, also known as "iPhone City," shows that industrial production levels have spiked higher recently, about a month later than historical seasonality, which we believe coincides with the ramp in iPhone 12 mass production.
In the city of Shenzhen, Morgan Stanley believes industrial production first spiked in early September, but remained below its usual levels for the same time last year. In Chengdu, the analysts found that industrial activity has increased in recent days. Likewise, in Chongqing, industrial production has ramped significantly higher in recent days, after an initial uptick and pullback in September.
The data suggests that the iPhone 12 and iPhone 12 Pro is performing better than expected since Apple appears to be increasing orders. Earlier today, a DigiTimes report speculated that demand for iPhone 12 Pro has been so strong among consumers that Apple's delivery lead time from manufacturers has had to be extended.
Apple is set to report its fourth fiscal quarter earnings later today, although since this reporting period ends in September, it will not include iPhone 12 and iPhone 12 Pro sales.
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