In a research note to clients obtained by The Mac Observer, Mr. Wu was attempting to answer questions from investors who asked if the threat of an eventual LTE-capable iPhone would keep customers from buying whatever Apple releases this fall. His answer, in short, was that people buy what they need today, and that even iPhone 4 remains a best-in-class device that is the top selling smartphone on the planet.
“iPhone 4 offers arguably the strongest set of features for customers globally and that’s why it continues to be the top selling smart phone despite it being a little over a year old,” Mr. Wu wrote. “In addition, in the bigger picture, smart phone penetration is still relatively low globally at what we estimate to about 25% of units currently and positioned to exit at about 30% by year end. The point being it is still early to worry about saturation.”
He also said that checks with Apple’s Asian suppliers leave him to believe that the next iPhone will have a larger display with a form factor approximately the same size as the iPhone 4.
“In addition to a dual- core processor that we have talked about before, our supply chain sources indicate that it will sport a slightly larger display than the current 3.5-inch retina display that is already industry leading,” he wrote. He said that Apple continues to avoid LTE, “due to battery life issues and spotty network coverage.”
Mr. Wu maintained his “Buy” rating on AAPL, along with his $500 price target.
Shares in AAPL traded lower Tuesday amidst a broad market sell-off, ending the day at $388.91 per share, down $7.84 (-1.98%), on moderate volume of 22.8 million shares trading hands.
*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.