Analyst: Fall iPhone Upgrade will be “Bigger than Expected”

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The Apple Crystal Ball
Apple’s iPhone refresh that everyone and their brother expects to take place this fall — probably with a September announcement — will be “bigger than expected,” according to Sterne Agee analyst Shaw Wu. He said that he believes that rather than being an interim upgrade on the way towards an eventual LTE iPhone, the iPhone 5 will be big enough to be, “fresh and competitive and helps maintain [the iPhone’s] leadership position.”

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.



Just a thought: It would be nice if not-yet-everyday acronyms like LTE were defined once in the article.


LTE = Lancashire Transport Executive.  Tim Cook said “not yet; we don’t want to get on board that train - It would mean redesigning the iPhone .. and we don’t want to do that .”

That just leaves the Thunderbolt (the other Thunderbolt, that is) as the only LTE (or nearly 4G) phone.


Are LTE and 4G amorphous specifications that wireless carriers and cell-phone manufacturers use to deceive the public? Or are we talking about LTE Advanced?

According to the The Free Disctionary, although “LTE [Long Term Evolution] is often marketed as 4G, first release LTE is a 3.9 technology since it does not fully comply with the IMT Advanced 4G requirements. The pre-4G standard is a step toward LTE Advanced, a 4th generation standard of radio technologies designed to increase the capacity and speed of mobile telephone networks. LTE Advanced is backwards compatible with LTE and uses the same frequency bands, while LTE is not backwards compatible with 3G systems.

Or does the complexity involved, or a poorly chosen acronym, somewhat preclude easy explanation to the public?


Apple?s iPhone refresh that everyone and their brother expects to take place this fall ? probably with a September announcement ? will be ?bigger than expected,? according to Sterne Agee analyst Shaw Wu

If true, this could have an even more substantial impact on other handset manufacturers than analysts predicted with only a modest refresh. [Courtesy Ted Landau on Twitter]

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