Investors and analysts concerned about Apple's future based on reports of iPhone 5 parts order reductions are needlessly worrying, according to Topeka Capital's Brian White. Instead, he said Apple is just fine and the reduction in parts orders was expected, if not a little late.
Topeka Capital's Brian White says consumers still want iPhones
"We believe the doomsday scenarios painted over the past week are inaccurate," Mr. White said, according to Fortune. He added that his research shows Apple cut iPhone 5 parts orders for December, but not October or November, and March's parts orders appear to be unchanged, too.
"We remain comfortable with our iPhone 5 and iPhone 4S forecasts for the December and March quarters, which appear to be conservative," he said. "Also, given our research in recent weeks, it is tough for us to ignore the resiliency of iPhone 4S demand as consumers flock to these discounts."
Wells Fargo analyst Shaw Wu offered up his own positive backing for Apple on Monday saying, "The Mayan apocalypse is not upon us," noting that Apple sold over 2 million iPhone 5 units during the first three days of availability. Mr. Wu expects Apple will beat his estimate of 46 million units sold for the December quarter.
Mr. White doesn't see Apple's parts cutbacks as a sign of weaker iPhone 5 interest. Instead, he called it a side effect of general parts supply issues. "During our October trip to Asia, we indicated that yield issues for certain components used in the iPhone 5 would result in supply constraints, which we believe is now driving Apple to cut orders at certain supply chain vendors for the first time in the December quarter," he said.
He added, "Actually, we are a bit surprised that these cuts didn't occur sooner."
Mr. White is maintaining his US$1,000 target price for Apple's stock. Apple is currently trading at $ 525.01, up 6.18 (1.19%).
1 Comments
It cracks me up how, despite all evidence of how well apple is run and how ubiquitous their products have been and continue to be, how much money they make and how much cash they have.. if there is even one inkling of a suggestion of an idea that sales of a certain product aren’t continuously setting and breaking records previously set by its predecessor, its time to run for the hills.
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