Apple Inc. (NASDAQ:AAPL) shares are continuing their downward trend in afternoon trades after the iPhone 5’s disappointing release in China. Meanwhile noted Piper Jaffray analyst Gene Munster defends the iPhone’s latest release and said there are more reasons to be excited about shares of Apple Inc. (NASDAQ:AAPL) instead of disappointed with it.
ValueWalk reported earlier today that Beijing firm T.H. Capital, LLC conducted a survey which indicated that sales of the iPhone 5 in China would be low. As the day wore on in China, the lines of consumers waiting to purchase the new iPhone were much shorter than they were on previous model releases, specifically the 4S. However Munster said the low turnout is likely due to three reasons which do not leave cause for concern about iPhone sales.
For one thing Apple Inc. (NASDAQ:AAPL) implemented a reservation system for this release of the iPhone. This made it possible for people wanted to purchase the smartphone to reserve it ahead of time rather than waiting in line to purchase it amidst the large crowds. Munster also believes that Apple has about double the points of sale for the iPhone 5 than it did for the 4S, which means the same amount of buyers (or more) would be spread out over twice as many places of purchase. Also the iPhone 5 is on two carriers, while the 4S was only on one, so it’s available for a wider range of smartphone users.
Munster also cited a report on the Chinese micro-blogging site Sina Weibo, which indicated that China Unicom had 300,000 pre-orders for the iPhone 5, compared to only 200,000 pre-orders for the 4S model.
According to Munster, Apple Inc. (NASDAQ:AAPL) shareholders shouldn’t get too worried about the current iPhone launch anyway because there are even brighter things to come in 2013. He believes the Apple Television and the cheaper iPhone are two of the biggest reasons to get excited about the stock as we head into next year. Munster has reiterated his Overweight rating and $900 price target.