Apple Inc. (NASDAQ:AAPL) is working towards improving its fingerprint sensor yields in the iPhone 5S and is planning to up the current production by three times, says a report from Jefferies analysts Peter Misek, Jason North and Billy Kim. The analysts, after meeting Apple’s supplier in Asia, expect improved yields due to “increased capacity and a packaging and test company” owing to which they raised the iPhone 5S estimates from 16 million to 18 million.Apple

New products will keep up the momentum for Apple

The iPad launch is expected to be in October, as per the schedule, but due to retina display issues for the iPad mini, the launch can be rescheduled to CQ1. Apple Inc. (NASDAQ:AAPL), according to analysts, will unveil the new product, but the number of units will be limited to 1-2 million during launch. iPad Mini Retina display is expected to cost around $229 to $279 compared to current $329. The display size is 9.7 inches and is expected to be 20 percent sleeker, and 30 percent to 50 percent lighter.

Analysts believe revenue of the iPhone will be at risk until the launch of iPhone 6, which is expected by September of next fiscal. However, the much awaited launches like iWatch and hybrid tablet/notebooks will maintain the momentum of the stock. The iPhone 6 is expected to have a larger display screen of 4.8 inches. Apple is investing in OLED apart from display, say analysts citing talks with Asian players. It is speculated that Apple Inc. (NASDAQ:AAPL) has started procuring the equipment from LG display, Sharp, and Japan Display. However, Jefferies analysts are expecting Apple to go by their 2-step transition thesis from in-cell to on-cell LCD.

5S sales in line, 5C a concern

Analysts believe that the iPhone 5C may perform lower than fiscal 2014 expectations, and iPhone 5S sales are declining faster than Wall Street expected. However, according to the analysts, improved margins and new products will “cause the market to be forward looking.”

Apple Inc. (NASDAQ:AAPL) may bring down the price of iPhone 5C to ramp up its sales and maintain growth rate. If Apple resorts to such a strategy, then gross margins will decline, resulting in less gross profit. Based on the first quarter 2014 estimates, if Apple brings down the iPhone 5C price by $100 and cannibalization of the iPhone 5S remains at 10 percent, then Apple will have to double its 5C units to maintain the level of gross profit.

In Singapore, Malaysia and Indonesia sales are as per the expectations, for iPhone 5S and iPhone 5C. Further, in China, 5S is getting popular and sales are expanding, but iPhone 5C sales are still weak. Launching iPhone 5S on DoCoMo has proven to be a right decision for Apple Inc. (NASDAQ:AAPL) in Japan, as the sales are better than expected. Sales on KDDI are below expectation, and at Softbank it is in line with the expectations. However, iPhone 5C is garnering below expected sales numbers on all carriers.