Apple Inc. (NASDAQ:AAPL) is clearly confident about the success of the iPhone 5S, according to Jefferies analysts, but they don’t believe the company will be able to live up to its own expectations. They ran some checks of Apple’s upcoming build plans for the iPhone 5S and other models.

Apple iPhone 5S

Checks show iPhone 5S production starting

Jefferies analyst Peter Misek issued a report to investors today highlighting their recent checks concerning Apple’s production schedule. He believes the company will begin production of the iPhone 5S this month and that it will be available in late September or early October.

He says his checks indicate that Apple Inc. (NASDAQ:AAPL)’s fiscal fourth quarter build plans are most likely toward the top of his 25 million to 30 million estimate. He also believes that the company’s fiscal first quarter build plans are around his 50 million to 55 million estimate.

For the fiscal fourth quarter, which begins in September, he’s estimating that the mix will be 15 million low cost iPhones, 15 million iPhone 5S models and no iPhone 4S models. He said that not building any iPhone 4S models during the quarter likely means that there’s excess inventory in the channel right now. Recently the firm slashed its iPhone estimates because of indications that there was extra smartphone inventory at the moment.

Demand for Apple products might not be high enough

In Misek’s view, the biggest concern for Apple Inc. (NASDAQ:AAPL) is that demand for its iPhone might not be as high as the company expects. He said the 50 million to 55 million unit build plan for the company’s December quarter indicates that Apple is confident in its new product launch, but he isn’t sure that demand will match supply.

According to Misek, their checks show “mostly incremental feature upgrades for the iPhone 5S.” As a result, he doesn’t see demand for the device being very high. He reports that the Galaxy S4 is still taking market share and that when the iPhone 5S does come out, it will have to contend with the Moto X phone made by Google Inc (NASDAQ:GOOG).

In addition he thinks that the low cost iPhone so many analysts have been counting on to turn things around will be priced around $300 or $400 and not be competitive in emerging markets where a low cost device is needed the most.

Checks show a shift from iPhone 5S to low cost iPhone

He also said their most recent checks indicate that Apple Inc. (NASDAQ:AAPL) is shifting its December quarter build plan from iPhone 5S models over to low cost iPhone models. As a result, he expects that the low cost iPhone might have more of a cannibalizing effect, which would hurt the company’s average selling prices and gross margins.

Misek reiterated his hold rating and $405 per share price target for Apple Inc. (NASDAQ:AAPL).