Aggressive iPhone launch plan boosts Apple outlook

EARNINGS BOOST: Sales of the new iPhone 5 could be double those of the previous model in its first week on the market, thanks to Apple Inc’s most aggressive smartphone launch plan yet, analysts said. — Reuters

CUPERTINO: Sales of the new iPhone 5 could be double those of the previous model in its first week on the market, thanks to Apple Inc’s most aggressive smartphone launch plan yet, and up to 33 million iPhones may be sold this quarter, analysts said.

Many expressed surprise at how quickly Apple planned to roll out the new model around the world, saying this showed supply constraints that afflicted past releases would not be a problem this time for the bigger, faster and slimmer iPhone 5.

The new model ships on Sept 21 in the United States, Australia, Canada, France, Germany, Hong Kong, Japan, Singapore and Britain, and will hit 100 countries by the end of the year in the fastest international rollout for an iPhone so far.

While many Apple watchers said the new iPhone lacked a “wow” factor, Apple shares rose after the launch, in contrast to a fall after the launch of the previous model, the 4S, almost a year ago.

“We are positively surprised that this iPhone rollout is Apple’s fastest yet,” Barclays Capital said in a client note, adding that it had previously thought supply constraints for sensors in the new screens would hold back initial sales.

“Given this pace it would seem Apple is very well positioned for upside in the December quarter.”

Analysts raised forecasts for Apple’s share price by as much as US$200 (RM600) to between US$750 and US$1,000 (RM2,250 and RM3,000). Apple shares were up 2.1% at US$683.81 (RM2,051.43) in heavy afternoon trading on the Nasdaq.

The iPhone 5 sports a 4in “retina” screen that displays a sharper image. It can run on high-speed 4G LTE wireless networks and is 20% lighter than the earlier iPhone 4S.

“While it lacked the mind-blowing innovation we have come to expect of Apple, (it) is differentiated enough to maintain a sizable product advantage over its competitors,” said FBR Capital markets, the brokerage that is forecasting Apple’s shares to hit US$1,000 (RM3,000) within the next year.

The previous iPhone 4S initially got a muted response from investors on its launch in October 2011, but customers loved it and booming sales have pushed Apple stock up 80% since.

Nokia, Blackberry blues

Apple will continue to win sales with older models, brokerage William Blair & Co added, putting more pressure on Research in Motion Ltd’s BlackBerry, other offerings from Nokia Oyj and less-sophisticated smartphones that use Google Inc’s Android software.

“The iPhone 4 will be sold for free after subsidies, replacing the 3GS and providing a strong product to compete in the high-growth, low-end smartphone market,” William Blair said.

The brokerage raised its sales forecast for all iPhone models by 29% to 33 million for the July-September quarter, at the top of forecasts seen by Reuters.

Brokerages raised their sales estimates for the September quarter from anywhere between 3% to 36%, with most expecting between 20 million and 30 million iPhones to be sold.

Janney Capital Markets said it expected the iPhone 5 to sell 7 million to 10 million units by the end of the month, while RBC Capital Markets expects 8 million to 10 million to be shipped during the same period.

RBC Capital said sales of iPhone 5 this month could result in additional Apple sales of US$4bil to US$5bil (RM12bil to RM15bil) for the fourth quarter ending Sept 30. The brokerage increased its price target for the stock by US$50 to US$750 (RM150 to RM2,250).

More to come

Barclays, which raised its price target for Apple stock to US$810 (RM2,430) from US$750 (RM2,250), said Apple would have a “unique holiday season” as it would also benefit from upcoming launches of a smaller iPad and new Mac computers.

Credit Suisse forecast 20% growth in high-end smartphone sales next year, with Apple seen grabbing a 47% share, topping archrival Samsung Electronics Co Ltd with 40%.

It picked the two companies to capture just over half of the overall smartphone market, including less-sophisticated models, putting “tremendous pressure” on RIM, HTC Corp, Nokia and the rest of the Android market. — Reuters

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