Apple Inc. (NASDAQ:AAPL) will soon be coming up with iPhone 5 on Wednesday, September 12, with improved and new features. The new version of iPhone will have a baseband chip supporting LTE, larger and improved display, improved processors and more memory, new form factor and casing material, 3D maps and turn-by-turn navigation, along with a new connector and SIM card technology.
According to a research report from Morgan Stanley, a partnership with China’s leading teleco, China Mobile, will be a huge positive for the sales for the new version of iPhone in the fastest growing Chinese smartphone market. Along with this, the soon to be launched iPhone 5 includes a chip compatible with CM’s TD network that will serve as a huge bonus.
If historical numbers are anything to go by, Apple Inc. (NASDAQ:AAPL) could ship 48 million to 53 million iPhone 5’s in Q4, and up to 266M in FY13, which are above the estimates from Morgan Stanley of 45M in C4Q and 180M in FY13. Backed by strong demand and a broadening carrier base, the report says “our bull case estimate of 247M in CY2013 appears achievable.” The report also expects “potential for an additional 8-10M iPhones shipped in C3Q12, translating to $2.00-2.60 EPS upside.”
As per a research report from Morgan Stanley “a 3-month extension of upgrade terms” results in a decline of 1.3 million iPhone shipments to the US, which translates into 3.5 Million global reductions in C4Q12. As was done by Apple with the launch of iPhone 4S, the company could compensate for the decline by adding new carriers and market share gains from other platforms. Historically, Apple has been successful in gaining on an average, two points of smartphone market share with each of the previous two launches.
The report points out that Apple Inc. (NASDAQ:AAPL) shares have outperformed S&P on an average, by 12 percent in the last six months and by about 30 percent in the 12 months following the announcements of the last four iPhones. The report is very optimistic of the iPhone 5 success, given the significant upgrades in the new version and on tops of it an unimpressive response to the recent launches from the competitors. “While 1-4% of under-performance in the week post announcement is typical, we believe the significant changes to iPhone 5 and lukewarm reaction to competitors’ recent product launches could result in better performance.”
