Analyst: iPhone 6 in September, Followed by Large iPad and iWatch
Susquehanna Financial Group analyst Christopher Caso adjusted his earnings estimates for Apple’s (NASDAQ:AAPL) upcoming quarters in a recent note to investors based on a revised launch timeline for the next-generation iPhone. Caso previously thought that Apple might launch the so-called “iPhone 6” as early as this summer, but based on his recent supply chain checks, the analyst now believes that Apple will follow the typical iPhone refresh cycle with a launch in the fall. Like many other analysts, Caso also believes that Apple is preparing to launch two iPhone models with different screen sizes.
“We expect that a smaller screen version of iPhone 6 will commence production in July, with a larger version beginning production in August,” wrote Caso in a note obtained by Barron’s. “While we think the phone launch timing will be similar to last year, based on initial production forecasts, we think there is likely to be more volume available at launch as compared to last year.”
Based on his revised iPhone 6 launch timeline, Caso cut his estimates for the second and third quarters. “Note that our estimates had previously been more aggressive, and had assumed that AAPL would be able to ship some iPhone 6 volume in July,” wrote Caso in a research note seen by Barron’s. “For 2Q, our revised estimates reflect sales of 30 mln iPhones, down from 32.6 mln previously, and slightly lower iPad units (18 mln vs. 20 mln previously). For 3Q, we expect 37 mln iPhone units, which anticipates a very strong launch with more volume available vs. last year.”
Caso’s supply chain checks also indicated that Apple is developing the long-rumored iWatch, as well as a large-format iPad. “[W]e have finally noted two new products on the production schedule, including a watch as well as a 12” tablet that contains a keyboard,” wrote the Susquehanna analyst. Caso introduced estimates for fiscal year 2015 based on a potential iPad Pro and iWatch launch in the December quarter of 2014.
“Our estimates reflect modest assumptions for phone and 12” iPad shipments in C4Q,” wrote Caso in a note provided by Barron’s. “We believe watch production is anticipated to be 3 mln units/month starting in September, although this may change as we get closer to launch. Our revised FY14 estimates of $184.9 bln/$42.54 are down from $195.5 bln/$46.51 and reflect the later launch of iPhone 6. We are also introducing our FY15 estimates of $198.5 bln/$46.80.” Caso maintained a “Positive” rating on Apple shares.
Caso isn’t the only analyst who sees an Apple iWatch arriving later this year. Well-connected KGI Securities analyst Ming-Chi Kuo recently reiterated his prediction that the iWatch would be launched before the end of this year, reports International Digital Times. On the other hand, Kuo believes it is unlikely the iPad Pro will be offered before 2015. It should be noted that Kuo’s large-screen iPad prediction also aligns with a recent report from DigiTimes Research that stated Apple had “shelved its large-size tablet project.” However, rumors of an upcoming iWatch recently received a boost when the Financial Times reported that Apple has been trying to recruit Swiss watchmakers from various luxury watch brands.
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