Apple Inc. is widely expected to launch the iPhone 6 in September. German carrier Deutsche Telecom has told its officials that the device will reach customers on September 19. Amid all these rumors and speculations, Jefferies analyst Peter Misek took a trip to Asia to witness the development in supply chain. Misek has a Buy rating on Apple with $700 price target.
Suppliers offering concessions on iPhone 6 components
The iPhone 6 build plans remain unchanged at 80 million units in the second half of this year. That’s about 50% higher than the iPhone 5S shipment in 2H, 2013. Misek said Asian suppliers are extremely optimistic about the device. Meanwhile, Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) has reduced the Galaxy S5 builds from about 70 million to 60 million units, indicating a slowing demand.
Suppliers told Jefferies that they will face a disappointing year if they don’t supply for the iPhone 6. So, they are offering pricing concessions, boosting Apple Inc.’s bottom line. The tech giant is also expected to raise the iPhone 6 price by $100, which could help its margins. Though the research firm expects the iPhone 6 shipment to be 50% higher than the 5S in the first three quarters of launch, it says that its assumption could be conservative.
Suppliers to produce 40 million units of the 5.5-inch iPhone 6
Jefferies says that the 4.7-inch iPhone 6 will most likely be launched in September. Its in-cell LCD display is expected to be produced primarily by LG Display and Japan Display. Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) (TPE:2330) will be responsible for the A8 processor. For the 5.5-inch model, Apple Inc. is aiming for a November launch. But delays due to display production issues could push the launch to Chinese New Year (February 18, 2015). Supply chain checks suggest that 40 million units of the 5.5-inch iPhone 6 will be produced in the initial 12 months.
Jefferies says that the iWatch is ready for full production, so it could be launched at any time. The Cupertino-based company is expected to launch an upgraded Apple TV box later this year with gesture and voice control features. And yes, Apple Inc. hasn’t given up on the full-fledged iTV, which Jefferies says could be launched in 2H, 2015. Misek believes that the successful launch of iWatch and iTV could create multiple expansion. The company has procured thousands of TV panels at 55-, 60-, and 65-inch sizes.
