Author: PATRICK SEITZ

Cellnet Review 0

Apple iPhone Demand Soft, But That’s OK, Analyst Contends

Demand for Apple (AAPL[1]) iPhones is soft as consumers await the fall launch of the company’s 11th-generation handset, the rumored iPhone 8, but that’s nothing to be worried about, according to one analyst.

“Our work indicates iPhone demand remains soft, as expected ahead of the iPhone 8 launch,” Nomura Instinet analyst Jeffrey Kvaal said in a note to clients Wednesday. “We expect the iPhone 8 to bring sufficient upside to defer concerns of the next phone cycle for now.”

He believes the current softness in iPhone sales bodes well for Apple’s fiscal first quarter, which starts Oct. 1. But iPhone sales in the next two quarterly reports are likely to be lackluster.

Analysts are expecting iPhone-unit sales of 41 million and 47 million in Apple’s fiscal 2017 third and fourth quarters, respectively, he said.

“Our checks indicate U.S. (iPhone) subscribers are deferring (upgrades) until the higher-ASP (average selling price) iPhone 8 launches,” Kvaal said. “We believe U.S. carriers are preparing assertive promotions for the launch.”


IBD’S TAKE: For the latest on Apple stock, visit IBD’s news page[2] 


Sprint (S) and T-Mobile US (TMUS[3]) are likely to be aggressive with their iPhone 8 promotions to attract new subscribers, while market leaders AT&T (T) and Verizon (VZ) will be competitive to defend their bases, Kvaal said.

Kvaal is modeling iPhone sales of 87 million units for fiscal Q1, vs. a consensus of 83 million. For fiscal 2018, Kvaal expects Apple to sell 260 million iPhones, vs. a consensus of 242 million.

Kvaal expects the iPhone average selling price in fiscal Q1 to be $737, vs. a consensus of $719, thanks to the premium-priced iPhone 8.

The iPhone 8 is rumored to feature a major redesign with a 5.8-inch OLED display, wireless charging and augmented-reality capabilities.

RELATED:

As iPhone Turns 10, Apple Is Preparing To Replace It[4]

References

  1. ^ AAPL (www.investors.com)
  2. ^ IBD’s news page (www.investors.com)
  3. ^ TMUS (www.investors.com)
  4. ^ As iPhone Turns 10, Apple Is Preparing To Replace It (www.investors.com)
Cellnet Review 0

Samsung Galaxy S8 Launch Pushing Closer To Apple’s iPhone 8

Samsung signaled Monday that it could delay the launch of its new flagship smartphone, the Galaxy S8, pushing its release closer to that of rival Apple‘s (AAPL[1]) iPhone 8.

Samsung usually has a head start on Apple, releasing its latest phones in March or April. Apple traditionally follows with its newest handsets in September. For the past three cycles, Samsung has unveiled its latest smartphones at the Mobile World Congress trade show. But not this year.

Samsung mobile chief Dong-jin Koh said Monday that the Galaxy S8 will not be revealed at Mobile World Congress, which runs Feb. 27 through March 2 in Barcelona.

The announcement came at a press event where Samsung disclosed the results of an investigation into what caused a series of fires in Galaxy Note 7 handsets, Reuters reported[2]. Samsung blamed manufacturing defects in batteries produced by two suppliers for the fires, which led to an embarrassing recall for the South Korean electronics giant.


IBD’S TAKE: Apple stock has an above-average IBD Composite Rating of 60, meaning it has outperformed 60% of stocks in key metrics over the past 12 months. For more information on Apple stock, visit the IBD Stock Checkup[3].


Samsung indicated that it could delay the launch of the Galaxy S8 to ensure product quality and safety with the new handset, Reuters said.

Apple is expected to release its 10th-anniversary iPhone, unofficially called the iPhone 8, in September. That 11th-generation smartphone is rumored to feature a glass sandwich design, borderless OLED display, invisible home button and fast or wireless charging. It also might include augmented reality and facial recognition capabilities.

CFRA Research analyst Angelo Zino on Monday reiterated his strong buy on Apple stock and raised his 12-month price target to 140 from 130.

Zino upped his price target on Apple stock based on favorable expectations for the company’s fiscal first-quarter earnings report, due for release on Jan. 31.

“We see Apple aided by strong iPhone 7 Plus sales, the Apple Watch Series 2 launch, and an extra week” of sales in the quarter, he said in a note. “We see a potential ‘air pocket’ in iPhone demand due to consumers awaiting a fall ’17 iPhone release, but note favorable comps. We see robust services growth and improving Mac sales after a product refresh.”

Apple stock was flat, near 120, in afternoon trading on the stock market today[4], still in a buy zone from a 118.12 buy point touched this month.

RELATED:

Apple Services Growth Sparks Price-Target Hike[5]

Analysts Divided On Apple Ahead Of Q1 Earnings[6]

OLED iPhone 8 Might Not Ramp Production Until September[7]

References

  1. ^ AAPL (www.investors.com)
  2. ^ Reuters reported (www.reuters.com)
  3. ^ IBD Stock Checkup (research.investors.com)
  4. ^ stock market today (www.investors.com)
  5. ^ Apple Services Growth Sparks Price-Target Hike (www.investors.com)
  6. ^ Analysts Divided On Apple Ahead Of Q1 Earnings (www.investors.com)
  7. ^ OLED iPhone 8 Might Not Ramp Production Until September (www.investors.com)