updated 10:35 am EDT, Fri October 29, 2010
Warranty issues may have hurt Apple margins
Industry data backs the possibility of a CDMA iPhone, according to UBS' Maynard Um. The analyst cites checks as showing a potential 50 percent sequential increase in first-quarter capacity "for a certain iPhone component," believed to be related to a CDMA model. While sparse on details, the claim is in line with numerous other reports backing the launch of a Verizon iPhone early next year, possibly as soon as January.
In regards to the company's recent 10-K filing with the SEC, Um comments that warranties may have contributed to lower profit margins. "Based on our analysis, an 'over accrual' of product warranties of ~$170mm (warranty accruals increased by $300mm q/q while warranty claims only increased $131mm) drove 90bps of the margin miss (& impacted EPS by $0.18)," he writes in a new memo. "Any potential accrual reversals in F1Q could help mgns w/ every $50mm of reversal = 20bps of gross mgn or $0.04 EPS."