Apple‘s (AAPL) Asian suppliers are enthusiastic about iPhone 8, according to Bank of America Merrill Lynch.

We met with several suppliers that are excited about the upcoming launch of the iPhone 8. Supply chain is indicating roughly 100mn new iPhones in 2H17 with the organic light-emitting diode (OLED) model accounting from 45-60% of units. Supply chain has confirmed the launch of three SKUS (stock keeping units) with one OLED model with 2.5D glass (OLED screen approx. 5.1 inches), and two LCD models of 4.7 inch and 5.5 inch.

All three models are expected to have front and back glass cover and wireless charging. The frame is expected to be stainless steel in the OLED model and aluminum in the other two. Given the significant content increase, in our opinion, AAPL will raise the ASP (average sales price)  significantly for the iPhone 8. It will be very important for Apple to segment the market appropriately given the demand is likely to be very strong for the OLED model (contingent on price) but could lead to weaker demand for the non OLED products based on the price differential.

The iPhone 8 could be sold out for more than 2 quarters More OLED capacity will help in 2018 as other suppliers (outside of Samsung) ramp capacity. However, for a couple of quarters post launch, the demand could outstrip supply (see potential upgrade tailwinds in our installed base analysis) for the iPhone 8. The demand for the 7S, 7S+ is less clear although there are some new features coming to these models.

AAC Technologies (2018.Hong Kong) soared 10.1%, the second best performing stocks on the Hang Seng Composite Index, after the supplier of haptics and acoustics to Apple painted a rosy outlook for 2017. For details, see “AAC Tech: A Purer Play On Apple iPhone Strength“

Source: barrons