In contrast to a stream of negative notes today on Apple (AAPL)” Deutsche Bank’s Chris Whitmore reiterated a Buy recommendation on the stock and raised his price target on the shares to $530 from $500, arguing that a cheaper iPhone may boost the company’s shipments, and that its production of iPads is doing well.�
Whitmore reiterates his belief that two new models of iPhone will come out in October, a version “5,” and a version “4S,” the latter being a cheaper device that will help the iPhone take over what is now the mid-range, or “feature-phone” market:�
We believe Apple can produce it at volume with a sub $150 bill-of-material cost (previously we estimated ~$165); giving it flexibility to drive volume, margins and share (i.e. ASP of $300-350 and still be accretive to corporate margins). An aggressive push into the mid-range will essentially double AAPL’s iPhone [total addressable market] in the near term.
Current iPhone 4 demand is still tracking Better than expected despite that upcoming rollout, he thinks.�
Whitmore raised his iPhone unit shipment estimate this calendar year to 82 million units from a prior 79 million, and raised his 2012 estimate to 110 million from 105 million.�
As for iPad production, “iPad manufacturing yields and volumes improved materially through 3Q which should support both margins and drive volume upside in the quarter.”
Apple shares are down $5.10, or 1.3%, at $399.20.
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