Apple Inc. (NASDAQ:AAPL) is expected to unveil the iPhone 6 on Sept. 9, so the company’s manufacturers are supposedly ramping up for that launch. Cantor Fitzgerald analysts say July’s results from Apple suppliers were weaker than usual, but they pretty much glossed over that to focus on what comes next in the Apple story.
Apple Barometer misses
In a report dated Aug. 5, 2015, analyst Brian J. White says with 98% of Apple Inc. (NASDAQ:AAPL)’s Taiwanese suppliers’ sales reported, his Apple Barometer was “much weaker than historical seasonality.” He said in the past nine years, July sales for the suppliers in the barometer have grown by an average of 10% month over month. However, this year July sales were flat.
The analyst adds that this July was the weakest July ever for his Apple Inc. (NASDAQ:AAPL) Barometer, which is made up of suppliers in Taiwan that see a large percentage of their sales from Apple.
What this suggests about the iPhone 6
There have been reports that Apple Inc. (NASDAQ:AAPL) won’t release the iPhone 6 until October, and White says that the July weakness in his barometer does appear to back up those reports. He doesn’t think it matters much whether Apple releases the next iPhone in September or October. However, one thing he thinks does matter is that Apple launches both the 4.7-inch iPhone 6 and the rumored 5.5-inch model before the end of this year.
He says that in his trips to China over the last couple of years, he’s noticed consumers buying “‘awkwardly’ large” smartphones. He thinks they see these big smartphones as being a sort of fashion statement there and also a way for the Chinese to consolidate devices by having a big phone that’s also like a small tablet. The analyst also states that he has noticed that Apple’s iPhones have been losing momentum in China. He adds that interest in an iPhone with a bigger screen is significant in China, so Apple must deliver it this year to meet the pent-up demand.
Other reasons for Apple’s “Fab Fall”
White also notes that investors are looking ahead to what he is calling Apple’s “Fab Fall.” He said in addition to the bigger iPhone 6, investors are anticipating the rumored iWatch. Also he says Apple Inc. (NASDAQ:AAPL) is likely benefiting from the 4G ramp at China Mobile and that investors expect great things from the company’s enterprise-focused partnership with International Business Machines Corp (NYSE:IBM).