Since Apple Inc. (NASDAQ:AAPL) launched the iPhone 5S and 5C, analysts have been keeping a close watch on inventory levels. Findings from two different analysts suggest that there’s plenty of supply for the iPhone 5S in China, but not in the U.S. Perhaps unsurprisingly, the iPhone 5C appears to be widely unpopular.
iPhone 5S is available in China
Cantor Fitzgerald analyst Brian J. White released highlights from the seventh day of their tech tour in China and Taiwan. He reported meeting with a tech supply chain company and a component supplier. They also visited “dozens of local smartphone-focused retailers / resellers.”
When investors are looking for a hedge fund to invest their money with, they usually look at returns. Of course, the larger the positive return, the better, but what about during major market selloffs? It may be easy to discount a hedge fund's negative return when everyone else lost a lot of money. However, hedge Read More
At those retailers, they found that the iPhone 5S was “frequently” in stock, even the champagne / gold color. The space gray iPhone 5S was more frequently out of stock than the other colors, which is the opposite of what analysts have observed in the U.S. market. White believes Apple Inc. (NASDAQ:AAPL) may have allocated a larger number of gold models for the China market than it did for the U.S. market.
Apple’s iPhone 5C is widely available in China
During their visit, White and his team also found that the iPhone 5C was widely available in China, and it wasn’t just because there was plenty of supply. They said research suggest that for every 10 new iPhone models (including both the 5S and the 5C), 70 to 80 percent of them are the iPhone 5S, while 20 to 30 percent of them are the iPhone 5C.
White said their checks of production for the iPhone 5C suggest that demand for the handset is soft. They believe orders for the device will have to be reduced in the future. White continues to rate Apple Inc. (NASDAQ:AAPL) as a Buy with a $777 per share price target.
Apple’s iPhone 5S is scarce in the U.S.
Piper Jaffray analyst Gene Munster has been focusing on iPhone 5S and 5C levels in the U.S. According to Munster, supply of the iPhone 5S fell significantly, from 27 percent two weeks ago to 6 percent within the last week. He also found that the number of stores which had one or more iPhone 5S available fell from 90 percent two weeks ago to 40 percent within the last week. He based his numbers on checks of 60 Apple stores.
The analyst believes Apple Inc. (NASDAQ:AAPL) is gearing up for the international launch of the iPhone 5S and attributes the rapidly depleting supply to this preparation. He notes that by Nov. 1, 51 additional markets will receive the iPhone 5S and 5C.
iPhone 5S resale value is high
Munster has also been looking at resale value for Apple Inc. (NASDAQ:AAPL)’s devices and found that in the U.S., the 16 GB iPhone 5S is selling at a 32 percent premium. The iPhone 5C, however, is actually selling at an 11 percent discount on the resale market. Interestingly enough, Samsung’s Galaxy S4 is selling at a 12 percent discount on the resale market, which means Samsung’s flagship device is reselling at a discount that’s similar to the iPhone 5C, which has lower specs and is essentially Apple Inc. (NASDAQ:AAPL)’s last year’s model.
Like White’s checks in China, Munster has found in the U.S. that the iPhone 5C appears to be widely available.