Sterne Agee cuts Apple targets on talk of less iPhones

  • updated 10:55 am EDT, Fri March 15, 2013
  •         by MacNN Staff

Apple drawing down ahead of refresh, analyst argues

Sterne Agee analyst Shaw Wu has reduced his expected iPhone shipment numbers and lowered his price target for Apple stock, citing "supplier checks" pointing to smaller iPhone build plans. "We are picking up from our supplier checks build plan reductions for iPhone likely due to an inventory drawdown ahead of refreshes in the 2H," he writes in a new investor memo. The analyst's price target has been slashed from $715 to $630.

"In addition, we see evidence of sourcing activity for what appears to be iPhone 5S and a lower-cost iPhone using composite material casing," he continues. "We are reducing our iPhone forecast but leaving iPads and Macs intact. With 2 weeks left [in the March quarter], we believe AAPL will likely hit the lower end of its guidance. The good news is this is better than most expecting a miss."

Rumors of a new but low-cost iPhone model have been increasing in the past few months. Also backing the idea of a composite case is KGI Securities analyst Ming-Chi Kuo, who expects the phone to have a "super-thin plastic casing mixed with glass fiber," making it stronger than normal plastic cellphone casings. Apple has allegedly contracted with Foxconn and the Jabil group's Green Point for the part; while Foxconn will both produce casings and assemble phones, Green Point is expected to hand off casings to Pegatron. Kuo also anticipates casings coming in a range of four to six colors, and having a thickness of 0.4 to 0.6mm, below a more typical 0.7 to 1mm.

The analyst also claims that Apple will stick with a 4-inch display for the low-cost phone, despite rumors of a move to 4.5 inches. The device's specifications were picked in 2011, he alleges, suggesting moreover that Apple is unlikely to switch tacks despite an industry shift towards screens closer to 5 inches.

TAGS
6 Comments
  1. Avatar
    aristotles Grizzled Veteran Joined: Jul 16, 2004
    Mar 15, 2013 at 11:17 am

    He needs to find a career in writing fiction. Why would he be lowering targets if he already understand that production of the iPhone 5 is winding down as the iPhone 5S is ramping up? How would supplier checks have anything to do with sales?

    Is this guy trying to short the stock?

  2. Avatar
    Constable Odo Fresh-Faced Recruit Joined: Aug 22, 2007
    Mar 15, 2013 at 11:34 am

    by Tim Cook to not put too much stock in supply chain numbers. I don't think it matters whether this guy cuts target prices or not. I'm just thinking that these people do not know Apple's supply chain that well. They never talk about Amazon's Kindle supply chain or inventory or any number of other companies' supply chain. I think iPhone sales will be lower because it normally is after the Christmas quarter. How much lower is hard to tell. But, iPhone sales shouldn't fall any lower than the rest of the industry. Apple's retail stores are always pushing iPhones. I doubt any company can increase sales following the Christmas season, so what's the big deal.

    Apple's share price has already fallen 40% despite sales not falling 40% so $630 seems like an OK target price to me. I'd be happy if Apple finishes the year at $630 seeing the awful collapse Apple's share price is in right now.

  3. Avatar
    thinkman Junior Member Joined: Jan 04, 2005
    Mar 15, 2013 at 12:36 pm

    I think this one bugs me so much because I see it ALL THE TIME! Back when journalists (rather than the talking heads who've replaced these venerable stalwarts) actually studied grammar, this almost never happened. Regarding your headline, it should be "fewer" not "less"! Oh, and as regards the actual story - how many times do we have to hear the same old song based on a single "fact" rather than the whole truth. The internet is the future (and the present), but it is also the death of reliable journalism and analysis.

  4. Avatar
    thinkman Junior Member Joined: Jan 04, 2005
    Mar 15, 2013 at 12:41 pm

    Hey MacNN, what's with the unintended forward slashes in my comment? Perhaps it's time you find someone with more HTML experience (if, indeed, that is the problem - I'm a neophyte when it comes to coding, so my remedy may be completely off base).

  5. Avatar
    thinkman Junior Member Joined: Jan 04, 2005
    Mar 15, 2013 at 12:42 pm

    I meant backslash.

  6. Avatar
    Spheric Harlot Clinically Insane Joined: Nov 07, 1999
    Mar 15, 2013 at 12:51 pm

    "fewer"

Post a comment
Please note that it takes a couple of minutes for new comments to be visible in this area.
  

Now AAPL Stock: 112.88 ( + 0.17 )

Cirrus creates Lightning-headphone dev kit

Apple supplier Cirrus Logic has introduced a MFi-compliant new development kit for companies interested in using Cirrus' chips to create Lightning-based headphones, which -- regardless of whether rumors about Apple dropping the analog headphone jack in its iPhone this fall -- can offer advantages to music-loving iOS device users. The kit mentions some of the advantages of an all-digital headset or headphone connector, including higher-bitrate support, a more customizable experience, and support for power and data transfer into headphone hardware. Several companies already make Lightning headphones, and Apple has supported the concept since June 2014. http://bit.ly/29giiZj

Developer  89d

Apple Store app offers Procreate Pocket

The Apple Store app for iPhone, which periodically rewards users with free app gifts, is now offering the iPhone "Pocket" version of drawing app Procreate for those who have the free Apple Store app until July 28. Users who have redeemed the offer by navigating to the "Stores" tab of the app and swiping past the "iPhone Upgrade Program" banner to the "Procreate" banner have noted that only the limited Pocket (iPhone) version of the app is available free, even if the Apple Store app is installed and the offer redeemed on an iPad. The Pocket version currently sells for $3 on the iOS App Store. [32.4MB]

 89d

Porsche adds CarPlay to 2017 Panamera

Porsche has added a fifth model of vehicle to its CarPlay-supported lineup, announcing that the 2017 Panamera -- which will arrive in the US in January -- will include Apple's infotainment technology, and be seen on a giant 12.3-inch touchscreen as part of an all-new Porsche Communication Management system. The luxury sedan starts at $99,900 for the 4S model, and scales up to the Panamera Turbo, which sells for $146,900. Other vehicles that currently support CarPlay include the 2016 911 and the 2017 models of Macan, 718 Boxster, and 718 Cayman. The company did not mention support for Google's corresponding Android Auto in its announcement. http://bit.ly/295ZQ94

Industry  89d

Apple employees testing wheelchair features

New features included in the forthcoming watchOS 3 are being tested by Apple retail store employees, including a new activity-tracking feature that has been designed with wheelchair users in mind. The move is slightly unusual in that, while retail employees have previously been used to test pre-release versions of OS X and iOS, this marks the first time they've been included in the otherwise developer-only watchOS betas. The company is said to have gone to great lengths to modify the activity tracker for wheelchair users, including changing the "time to stand" notification to "time to roll" and including two wheelchair-centric workout apps. http://bit.ly/2955JDa

Troubleshooting  89d

SanDisk reveals two 256GB microSDXC cards

SanDisk has introduced two 256GB microSDXC cards. Arriving in August for $150, the Ultra microSDXC UHS-I Premium Edition card offers transfer speeds of up to 95MB/s for reading data. The Extreme microSDXC UHS-I card can read at a fast 100MB/s and write at up to 90MB/s, and will be shipping sometime in the fourth quarter for $200. http://bit.ly/294Q1If

Upgrades/storage  89d

Apple's third-quarter results due July 26

Apple has advised it will be issuing its third-quarter results on July 26, with a conference call to answer investor and analyst queries about the earnings set to take place later that day. The stream of the call will go live at 2pm PT (5pm ET) via Apple's investor site, with the results themselves expected to be released roughly 30 minutes before the call commences. Apple's guidance for the quarter put revenue at between $41 billion and $43 billion. http://apple.co/1oi1Pbm

Investor  90d

Twitter stickers slowly roll out to users

Twitter has introduced "stickers," allowing users to add extra graphical elements to their photos before uploading them to the micro-blogging service. A library of hundreds of accessories, props, and emoji will be available to use as stickers, which can be resized, rotated, and placed anywhere on the photograph. Images with stickers will also become searchable with viewers able to select a sticker to see how others use the same graphic in their own posts. Twitter advises stickers will be rolling out to users over the next few weeks, and will work on both the mobile apps and through the browser. http://bit.ly/29bbwUE

IPhone apps  91d