In a recent report, KGI analyst Ming-Chi Kuo noted that Samsung has experienced a better-than-expected market response to its Galaxy S6 and S6 Edge devices. According to the report, Samsung is expected to raise its 2015 shipment guidance by 50 percent from 35-40 million units to 50-55 million units. Kuo says that the increase in expected shipments is mainly due to a strong showing by the Galaxy S6 Edge.
Samsung’s head of mobile J.K. Shin commented earlier this month that the company expects record shipments of the Galaxy S6 and S6 Edge. Shin also noted, however, that it expects a constrained of the device production issues centered around the its curved display. Reviews of Samsung’s S6 Edge were lukewarm at launch, so it’s interesting to see the device beating expectations in terms of sales.
Kuo claims that, because of this stronger market response, Apple is looking to take a larger portion of its A9 processor orders for its next-generation iPhone to TSMC. Apple is reportedly worried that it will not be able to book sufficient 14nm capacity at Samsung due to the Galaxy S6 and S6 Edge being the company’s main focus and using the same 14nm process.
Apple is concerned about insufficient 14nm capacity at Samsung LSI. Due to better-than-expected market feedback on Samsung’s (KR) flagship Galaxy S6 and S6 Edge (mainly the latter), which 2015 shipments guidance is raised nearly 50% from 35-40mn units to 50-55mn units, Apple is concerned it may not be able to book sufficient 14nm capacity with Samsung LSI since S6 and S6 Edge are powered by in-house produced 14nm FinFET application processor Exynos 7420. We think this is another key factor in Apple’s pro-TSMC decision
Also in his most recent report, Kuo notes that Apple Watch pre-orders are expected to hit 2.3M, which is more than any other smartwatch to date. This lines up with a survey from earlier this week that said first day Apple Watch sales alone beat all Android Wear shipments in 2014.