Analyst: Apple TV, LTE iPhone are Coming

Following Apple’s second fiscal quarter earnings report, Canaccord Genuity analyst Michael Walkley expects the company will release an LTE-compatible version of the iPhone this fall, and that an Apple-branded television is on the way, too. Ahead of the new iPhone launch, however, he expects Apple will have to deal with a smartphone sales slump.

“While our checks indicate slowing iPhone sales ahead of the iPhone 5 launch, we believe very strong international iPhone sales position Apple for very strong sales of an LTE iPhone 5 in the December quarter and beyond to drive strong F2013 earnings growth,” Mr. Walkley said.

Apple television this fall, says Canaccord Genuity's Michael WalkleyApple television this fall, says Canaccord Genuity’s Michael Walkley

Apple broke its own records yet again on Tuesday when it reported second quarter revenue of US$39.2 billion. Gross margins came in at 47.4 percent, above Canaccord’s 42.8 percent prediction. Mr. Walkley said Apple exceeded his expectations thanks to a stronger iPhone mix.

He expects Apple really will release its own television some time this fall, too. “Following our supply chain checks, we have increased confidence Apple will launch a 50-plus inch LCD-TV product by [the first fiscal quarter of 2013],” he said.

Looking forward to the December quarter, Mr. Walkley sees Apple reporting big numbers, despite the company’s lower guidance. “While Apple’s guidance for EPS of $8.68 was below our $9.61 estimate and consensus of $9.93, we believe Apple’s growing iOS customer base positions Apple for extremely strong December quarter sales,” he said.

Mr. Walkley thinks Apple’s prospects warrant a 12-month target price raise from $740 up to $775, and he is maintaining his “Buy” rating for the company’s stock. Apple is currently trading at $607.41, up 47.13 (8.41%).