AAPL Stock: 123.25 ( -0.99 )

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Analysts expect strong iPhone sales despite launch delay

updated 02:40 pm EDT, Tue June 21, 2011

Calls for cheaper iPhone to compete with Android

A number of analysts have released reports focusing on Apple's range of products. Peter Misek of Jefferies & Co. suggests component makers are already receiving orders for the next version of Apple's smartphone, which he calls the "iPhone 4S." The handset is said to be ready to begin mass production sometime in July, with 5 million to 10 million units finished by the end of September.

Sales forecasts for Taiwan-based casing manufacturer Catcher Technologies point to "greater scale on [Apple's] aluminum unibody products," Misek suggests, according to excerpts from an investor note posted by Barron's.

Although Oppenheimer analyst Ittai Kidron still maintains an 'outperform' rating on Apple's stock, he cautioned that the company may not achieve a full month of sales in September if the next iPhone arrives late in the month.

The analyst also considers BlackBerries and Android-based smartphones as a "wild card" that may impact iPhone shipments. International demand is said to be stronger for "mid-tier/value smartphones," potentially giving Android offerings an edge if Apple fails to fulfill calls for a cheaper iPhone.

"Simply put, $600 iPhone expansion opportunities are good, but the opportunities are much greater with a complementary mini-iPhone ~$300," Kidron told investors.

Ben Reitzes of Barclays Capital points out that Apple's latest back-to-school promotion, which now offers a $100 App Store gift card rather than a free iPod, shows that the company believes "fostering an iOS ecosystem with other devices is far more important." The time-frame for the promotion is also viewed as an indicator of a "substantial Mac upgrade cycle" beginning in the September quarter.

Shebly Seyrafi of FBN Securities also chimed in on the company's Mac strategy, arguing that the "closed architecture" allows the platform to outshine the competition as a result of "superior integration." The analyst also suggests the iPhone and Mac computers still hold relatively small market share, enabling the company to maintain its recent record of significant revenue growth.

Although AAPL closed in the red yesterday, the stock has jumped by more than $10, or 3.2 percent, in mid-day trading.

by MacNN Staff





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