Canaccord Raises AAPL Target on iPhone 5s Expectations

| Apple Stock Watch

Following the introduction of the iPhone 5s and iPhone 5c, Canaccord Genuity analyst Michael Walkley raised his target price for Apple's stock from US$530 up to $550. Mr. Walkley thinks Apple's aggressive rollout plans, plus the strong feature set on the iPhone 5s will drive up revenue during the holiday buying season.

Canaccord Genuity: iPhone 5s will be good for Apple's bottom lineCanaccord Genuity: iPhone 5s will be good for Apple's bottom line

Apple plans to launch the iPhone 5s and iPhone 5c in more than 100 countries before the end of the year, and with China on that list, the potential for new device sales is even more promising.

Mr. Walkley told investors,

We believe the new iPhone 5S has very competitive high-end specifications versus leading Android smartphones including the world's first 64-bit A7 processor, a separate M7 motion co- processor and Touch ID -– a fingerprint authentication sensor built into the new home button. Further, we believe new capabilities in iOS 7 available September 18 along with the features and new colors for the 5S and 5C should drive strong sales, particularly to Apple's large iOS base.

He added that Apple will most likely jump up over the 700 million cumulative iOS device sales in October.

The price point for the iPhone 5c came in higher than expected, and instead of costing sales, Mr. Walkley sees that as an opportunity for Apple to bring in even more revenue.

Apple unveiled the iPhone 5s and iPhone 5c at a media event on September 10. The iPhone 5s replaces the iPhone 5 and includes a faster processor, better graphics rendering, built-in fitness tracking, improved camera, a fingerprint scanner for better security, and more. The iPhone 5c is a brand new mid-range iPhone model that sports the same specifications as the iPhone 5, but does away with the glass and metal back and sides in favor of plastic. The plastic back and sides are formed as a single piece, is highly scratch resistant, and is available in several colors.

Mr. Walkley said, "Given the slightly higher pricing for the 5c and aggressive launch plans, we increased our Fiscal 2014 iPhone sales estimate from 177 million to 180 million units and our ASP forecast from $543 to $562."

He also bumped up his fiscal 2014 EPS from $44.20 up to $46.05.

Mr. Walkley is maintaining his "Buy" rating for Apple's stock. Apple is currently trading at $466.03, down 28.61 (5.78%).

Comments

Lee Dronick

As usual AAPL is down after Apple’s announcement.

mrmwebmax

+

Lee,  from what I’ve read, a lot of analysts are complaining about the screen size. I still have a 4s and am perfectly happy with the screen on it. The big-screen Samsungs I’ve seen, IMHO, just look ridiculous. All the same, I’m betting the iPhone 6 comes with a larger screen size, or different screen sizes. I don’t think Apple can ignore the calls for it much longer.

Aftermac

Sure the new iPhones are expensive, but don’t most people get subsidized phones, or am I off-base here? $99 for the 5c seems pretty reasonable to me.

I do wish the 5s would start at 32 GB (and up to 128 GB), instead of 16. Flash memory is pretty cheap these days. On the surface it seems like the only reason to limit the entry level 5s is to avoid cannibalizing the high end 5c. Maybe what Apple should have done is start both models at 32 GB or only have one 5c model.

Lee Dronick

$99 is very reasonable.

Time will tell on the iPhone 6 size.

Yes, considering the apps, music, video, photos and files 16 GB is the bare minimum. Earlier this month there was fire in a RAM factory, it caused a spike in prices.

mrmwebmax

+

Lee, regarding the size of the 6, I read an interesting comment about why Apple may be sticking with the 4” screen: Women, it seems, don’t like the larger Samsung phones, as they are too big to fit comfortably in most women’s hands. Apple may just believe that the 5/s/c is the optimum form factor.

The funny thing is, as usual Apple is damned both ways: If the 6 still has the 4” screen, analysts will say Apple missed the boat again and needs to release a bigger iPhone. If the 6 does come with a larger screen, analysts will say Apple no loner innovates, is just copying Samsung, and is at least two years behind the trends.

Meanwhile, isn’t the iPhone still the #1 handset?

skipaq

With the A7 in the 5s it would be nice to set the minimum at 32 GB. That is one quibble for me. The screen size is perfect for our uses; but there will likely be an expansion of the iPhone line soon just as happened with the iPod. The market reacted negatively to the event primarily due to the price of the 5c. They are thinking of markets like China and the need for cheap iPhones. They just don’t get Apple. Apple releases a slightly better 5 with color plastic body pricing it the same as they used to with the latest discontinued model. Not cheap enough for them. How about the very affordable 4s still for sale?

Lee Dronick

Spot on mrmwebmax, fire for effect.

mrmwebmax

+

Thanks, Lee. Let’s face it, the press simply holds Apple to a different standard. But at least is gives The Macalope a living….

Question: Do Android email apps ever include the equivalent signature of iOS apps, “Sent from my iPhone/iPad”? I only ask because I just got yet another work email that was “Sent from [an] iPhone,” and it struck me that I don’t think I’ve ever seen an email, personally or professionally, sent from a mobile device that wasn’t an iOS device.

Has anyone?

Lee Dronick

  Do Android email apps ever include the equivalent signature of iOS apps, “Sent from my iPhone/iPad”? I only ask because I just got yet another work email that was “Sent from [an] iPhone,” and it struck me that I don’t think I’ve ever seen an email, personally or professionally, sent from a mobile device that wasn’t an iOS device. Has anyone?

I removed that signature my iPhone. Anyway, most of my friends who use Android devices seem to mostly communicate via a Text, or Facebook, if they are not calling. Could we tell by the long headers if an email was sent via an Android phone?

 

mrmwebmax

+

Anyway, most of my friends who use Android devices seem to mostly communicate via a Text, or Facebook, if they are not calling.

Interesting, in that texting and Facebook are ways friends communicate, but not professional colleagues. I think that speaks volumes as to which OS is more popular in the workplace.

Not sure about the headers.

Lee Dronick

True that I am no longer in the workplace.

Lee Dronick

I just checked the headers on an email sent from an iPhone, via the data network, there was a line in there “From Mobile” and the IP address of the server. When I checked an email sent from my iPhone via my WiFi and Uverse then the headers did not contain that line.

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