Despite complaints over iOS 6's Maps app, demand for the iPhone 5 is staying high, according to Sterne Agee analyst Shaw Wu. He sees production constraints as Apple's biggest problem, and that's improving, too.
Wu on iPhone 5: Demand is high, production improving
"Despite well-publicized concerns with its new Maps app, we have not picked up changes in supply chain build plans," Mr. Wu said. "Demand appears robust with its online store quoting a lead time of 3-4 weeks. In addition, we are seeing improving yields on in-cell touchscreens meaning it is becoming less of a constraint."
The biggest iPhone 5 issue Apple is dealing with now seems to be in putting the parts together because it "is not easy to build," according to Mr. Wu. He called Apple's iPhone issues short term.
"From our latest supply chain checks, the gating factor has now apparently become the assembly of the iPhone 5 itself. From our understanding, the product is not easy to build being a minimalist design using only aluminum and glass in its casing," he said.
Mr. Wu sees the concerns over accuracy in Apple's Maps app as a minor issue, too, since the data will improve over time. "People forget that Google Maps started out inferior to Yahoo Maps and Mapquest," he said.
Mr. Wu is maintaining his "Outperform" rating and US$840 target price for Apple's stock. Apple is currently trading at $662.15, up 2.76 (0.42%).