With speculation rife that Apple Inc. (NASDAQ:AAPL) would announce September 12th as the date for the release of the iPhone 5, Piper Jaffray’s Gene Munster was ready to jump into the fray as quickly as possible. Despite the confirmation of the date coming just earlier today, Munster has already penned a research note outlining his expectations for the device.
Apple has been known for several years now as one of the few companies that really manages to inspire awe with the mystery surrounding its products, and the short notice given to journalists and luminaries attending its conferences. That awe may have inspired the note Munster released today.
Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More
The report puts a twelve month price target of $910 on Apple Inc. (NASDAQ:AAPL). The launch of the iPhone at this stage, is expected to result in the sale of 8 million iPhone 5 models before the end of the quarter , given a ship date of September 21st, and no supply issues. According to Piper Jaffray’s projections, those sales would allow Apple’s EPS to overshoot Wall Street’s estimates by 12%, and an overshot of 8% on revenue.
The estimation of September 21st as the ship date for the iPhone is taken from media reports that correctly predicted the date of the launch. Apple has not yet confirmed any date for shipping. The company is expected to do so at the event itself.
This report also denies the possibility that the new model of the iPhone and a smaller iPad will be released at the same event. It is now expected that Apple Inc. (NASDAQ:AAPL) will launch its iPad mini, (or iPad nano, or iPad shuffle), at a separate event in October. Both, analysts and the media, seem convinced at this stage that the company plans to launch such a product in time for Christmas shopping, in order to challenge the dominance of the Amazon.com, Inc. (NASDAQ:AMZN) Kindle Fire in that market.
The major take away from this report is the projection that a 21st September ship date will result in the sale of a significant number of extra iPhones in the current quarter. Wall Street consensus lands that number at somewhere in the vicinity of 22 million iPhones. Munster argues that the release of the iPhone 5 will result in a jump to between 26 and 28 million in the quarter.
Apple Inc. (NASDAQ:AAPL)’s announcement of this release will be the subject of a torrent of speculation in the coming days, reaching a fever pitch on the day itself. Until Tim Cook gets up on stage and reveals the new model, speculation about its capabilities will, if previous years are a measure of anything, form a tight wall around all other tech news.
For those who believe Gene Munster to be inflating his figures beyond reasonable expectation, and those who are worried that the firm’s next big technological breakthrough will fall flat in the market’s eyes, sit back and take a nice relaxing look at the company’s performance in the last eleven months or so: