Our rationale is as follows: (1) the OLED model may trigger replacement demand among high-end users given its completely all-new-design form factor and notably superior specs in comparison to the TFT-LCD models; and (2) the new 4.7” iPhone, featuring glass casing and wireless charging, looks well positioned to tap replacement demand at the entry level.
As reported earlier, Apple is likely making the switch to a glass casing in order to support the wireless charging feature. Pegatron is said to be the exclusive supplier of the new 4.7-inch device and a wireless charger that may be included with some models.
In addition to the new 4.7-inch and 5.5-inch devices, a new OLED model featuring a "completely all-new-design form factor and notably superior specs" may result in "potentially unprecedented replacement demand". Apple is forecasted to sell 120-150 million new iPhones in the back half of 2017.
To our understanding, while demand visibility in 2H17F is as yet unclear and presumed pull-in demand may change anytime, upstream suppliers may be around now setting ramp-up targets for new iPhone pull-in of somewhere between 120mn and 150mn units in 2H17F, exceeding previous iPhone 6, 6s and 7 cycles of 110-120mn, 100-110mn and 90-100mn units, respectively. In other words, ramp-up for 2H17F pull-in may exceed the previous peak for iPhone 6, and hit a historical high.
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