The news on Thursday that Apple (NASDAQ:AAPL) had finally managed to match U.S. iPhone 5 inventories to the high demand will prove to be a big boost for the company this quarter, according to Citi analyst Glen Yeung.
What Apple Product Supply Conclusions Did Yeung Make?
Just like Piper Jaffrey analyst Gene Munster, Yeung and his team conducted checks at 50 Apple locations and found “increased availability of iPhone 5, limited availability of iPad mini, and wide availability of iPad 4.”
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Yeung said the iPhone 5 was widely available at 92 percent of the surveyed stores, while 90 percent of the outlets indicated that the smartphone would be available for most walk-in customers. AT&T (NYSE:T) models were available at 88 percent of the stores and Verizon (NYSE:VZ) models at 80 percent of the outlets.
While a version of the iPad mini was available at 80 percent stores, 96 percent indicated that availability was limited in terms of quantity, storage, or color. The analyst said he expected iPad mini supply issues to ease in the New Year, leading to a growth in quarter-over-quarter shipments for the smaller tablet. A 100 percent of surveyed stores said the iPad 4 was in stock, with only 6 percent indicating that the availability of the 10-inch tablet was limited.
What Are the Possible Impacts of This Review?
According to Yeung, the iPhone 5 numbers suggested that demand for the device was solid and that there was a potential of upside to his earlier sales forecast of 47 million unit shipments in the December quarter. Yeung added that the new smartphone was now available in 114 countries on 259 carriers, exceeding Apple’s targets.
While iPad mini supply problems persist, “based on input from Citi’s Arthur Lai, we believe yields issues will be short-lived,” the analyst said. According to Lai’s checks at Apple’s supply chain, between 12 million and 14 million units of the iPad mini were expected for the March quarter, up between 20 percent and 40 percent from an earlier Citi estimate of 10 million. While Yeung currently models a 38 percent quarter-to-quarter decline for iPads in the March quarter, he added on Thursday that this could “prove overly pessimistic.”
In short, the holiday news is pretty good for Apple.
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