Analyst Jun Zhang with Rosenblatt Securities recently came out with a note in which he appears to comment on a recent report that Apple (AAPL 0.31%) had slashed iPhone X production for the coming quarter from 50 million units to just 30 million units. 

Zhang, citing proprietary research, said that there have been "no further cuts after the holiday season." 

Apple's iPhone X.

Image source: Apple.

The analyst goes on to argue that the media reports claiming that Apple has cut iPhone X production are, in effect, reading the supply chain tea leaves incorrectly. 

"Taiwanese media reports and estimate cuts could be confusing the market as we believe that they are referring to previously mentioned iPhone 8/8 Plus production cuts with an iPhone X production ramp in December," the analyst wrote (via StreetInsider).

Further, Zhang observes that some of the softness at Apple component suppliers may not even be indicative of iPhone X production cuts. Those suppliers could, instead, be facing shipment reductions due to lower orders for the iPhone 8 as well as Android-based smartphones. 

"We highlight that we do not see 3D sensing or OLED panel order cuts, which are specific components for the iPhone X," Zhang explains. 

This makes sense

Zhang is just one analyst, so before rushing to make any investment decision, it's probably worthwhile to wait for other supply chain reports to come out. Good sources to watch here are Nikkei Asian Review (this publication nailed the order cuts during the iPhone 6s generation) as well as any reporting from KGI Securities analyst Ming-Chi Kuo (his reports are usually disseminated by the various Apple-focused blogs like MacRumors and Apple Insider). 

Nevertheless, I do think what Zhang is talking about here makes a lot of sense. 

Apple must've had a significant production ramp-up in support of the iPhone 8 and iPhone 8 Plus phones -- the phones that were Apple's newest available phones for the last third of September and all of October. 

Apple's iPhone 8 Plus (left), and iPhone 8 (right).

Image source: Apple.

However, once the iPhone X came out, it's only natural that production of the iPhone 8 and iPhone 8 Plus (I think iPhone 8 sales will be cannibalized by the iPhone X to a larger degree than iPhone 8 Plus sales will) would come down as iPhone X production scaled up. 

If the supply chain reports weren't taking the proverbial pulse of suppliers that mainly produce components for the iPhone X (hence the commentary from Zhang about OLED displays and 3D sensing components), then the chances of a misread of what's going on clearly go up.

The best thing for investors to do, then, is to wait and see if Zhang's analysis is corroborated by another credible source or if more voices come out saying that it's iPhone X production that's getting the proverbial ax. 

The best source of them all

Apple is expected to report its financial results early in February 2018. Those financial results will include the company's revenue performance for its most recently ended quarter (the first quarter of Apple's fiscal year 2018), as well as a financial projection for the coming quarter. 

The figure that investors should probably pay close attention to is the revenue projection for the coming quarter. Remember that the iPhone X wasn't available for the entirely of the quarter that Apple will report results for in February, so there should be some degree of iPhone X revenue push-out into the following quarter.

If iPhone X demand remains strong, then expect Apple to issue strong guidance for the second quarter of its fiscal year 2018 (in other words, look for the seasonal drop in revenue from the fiscal first quarter to the fiscal second quarter to be lower than it has been in prior years). 

For some context, Apple saw iPhone units drop 35% quarter over quarter during the second quarter of its fiscal year 2017, with revenue down 39% in that time.

If iPhone X demand has petered out, then the guidance Apple will issue in early February could be less impressive than what many investors and analysts expect.