Analyst on Apple: Fingerprint Sensor Production Problems Ahead

Source: Apple.com

Will Apple (NASDAQ:AAPL) be plagued by iPhone 5S production difficulties? According to Jefferies analyst Peter Misek’s supply chain sources, the iPhone maker’s suppliers are encountering “terrible” yields on the new fingerprint scannerStreetInsider reports.

The Touch ID fingerprint scanner is one of the primary features of Apple’s iPhone 5S. However, Misek believes that the yield issues for this technology will lower the expected number of iPhone builds in the second half of 2013. For the current quarter, Misek projects 5 million to 10 million iPhone 5S units and 20 million iPhone 5C units.

Misek is equally pessimistic with his build estimates for the calendar fourth quarter. Although the analyst is modeling builds of 20 million to 25 million units for the iPhone 5S and 30 million for the iPhone 5C, he noted that both estimates are likely to be lowered.

“We note that the build plans vary widely (much more than normal) depending on the supplier, which we interpret to imply a combination of build cuts and component inventory issues,” Misek wrote, via StreetInsider. ”Prior CQ413 builds were 55 million to 60 million vs. current 48 million to 60 million with almost all of the downside revision due to the 5S.”

Based on this information, Misek lowered his price target on Apple stock from $450 to $425.The analyst also maintained a Hold rating on the stock. Here’s how Apple has traded over the past five days.

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