Analyst Sees iPhone 5 as Biggest Apple Catalyst for 2012

iPhone Cash

Sterne Agee analyst Shaw Wu believes that the next generation of iPhone will be the the biggest catalyst for growth for Apple’s stock on 2012. The analyst believes that the iPhone 5 will be a “more radical refresh” that includes 4G LTE support for faster data networks.


“From our checks with supply chain and industry sources and consistent with what we had said in early August,” the analyst said in a research note obtained by The Mac Observer, “we are picking up that the new iPhone will be a more radical update with a sleeker, thinner form factor, and a slightly larger screen.

“In addition,” he added, “it will likely incorporate 4G LTE technology, which would provide a significant boost in wireless network performance. We believe this significant update keeps the iPhone fresh and competitive and helps maintain its leadership position.”

Mr. Wu is among the Wall Street analysts who believes that Apple’s whole widget business model offers the company a competitive advantage. He believes that this will come into play in that Apple’s late entry to 4G LTE will allow the company to offer customers a better experience than 4G Android devices currently offer.

Mr. Wu wrote that, “In terms of battery life issues and spotty network coverage that plague shipping 4G LTE smart phones today, our supplier sources indicate that AAPL can derive superior performance with its ownership of core intellectual property including systems design, semiconductors, battery chemistry, and software.”

He believes the refresh will be released in late summer or the fall. The most recent iPhone refresh, the iPhone 4S, was released in October of 2011.

Other growth catalysts the analyst recognized include signing China Mobile as an iPhone carrier in China, the release of the next generation of iPhone, and the possibility of a “real Apple TV.”

The analyst maintained his “Buy” rating on AAPL and a $500 price target on the stock.

Shares in AAPL rose Monday, ending the day at US$413.44, up $2.21 (+0.54%), on moderate volume of 9.2 million shares.

*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.