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Wu: Apple iPhone 5 production cuts point to newer Apple iPhone 5S plus lower cost model

Posted: , by Alan F.

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Wu: Apple iPhone 5 production cuts point to newer Apple iPhone 5S plus lower cost model
Analyst Shaw Wu of Sterne Agee has been talking to his contacts in Apple's supply chain, and what he found out was important enough for the analyst to put in a note to his clients on Friday. According to his contacts, Wu says that Apple is slowing production of the Apple iPhone 5 and that the reduction in build fits in with the idea that the Apple iPhone 5S will be coming shortly. Wu also expects to see a low-priced version of Apple's iconic smartphone to be made of composite materials.

But Wu might be barking up the wrong tree. Apple CEO Tim Cook earlier this year warned analysts who use supply chain information to make predictions not to put too much faith in the data they receive. "The supply chain is very complex, and we obviously have multiple sources for things," Cook said. "Yields might vary, supplier performance might vary." And even if some data from the supply chain is accurate, Cook says that it is impossible for analysts to know with certainty what it means that Apple is doing.

Wu cut his target on Apple to $630

Wu cut his target on Apple to $630

On the other hand, it is in Cook's best interests to keep certain information secret, and by reducing the importance of certain data, he is trying to keep analysts off-balance and the public in the dark. In the meantime, other sources have been talking up the Apple iPhone 5S with talk that the device is already being produced by Foxconn and will sport an A7 processor along with a new improved camera or camera lens with a "Smart Flash" that uses white and yellow LED lights to improve color representation on pictures taken with the phone.There is also talk about fingerprint recognition and support for NFC.

Due to the rumored production cuts for the Apple iPhone 5, Wu has cut his target price for Apple to $630 from $715. The shares are trading Friday at $440. The analyst expects Apple to hit the lower end of its profit guidance for the current quarter while other analysts see the Cupertino based company missing its guidance range completely.

source: AppleInsider

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1. xperiaDROID posted on 15 Mar 2013, 11:11 8 1

Poor Apple, it is going lower and lower.

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3. quakan posted on 15 Mar 2013, 11:17 3 3

Yes, poor Apple.

Mkt Cap. - 413.91B

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6. Aeires (unregistered) posted on 15 Mar 2013, 11:50 1

How much of their worth is tied up in AAPL or locked in overseas accounts that are difficult to pull from?

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8. Hemlocke posted on 15 Mar 2013, 12:05 3

Not enough to hurt them. Wall Street has just decided to punish Apple until they succumb and do the things that analysts want them to do:Buybacks and bigger dividends. There really is no good reason for the stock fall, in much the same way there is no good reason for Amazon's stock to be doing well.

AAPL is one of the most attractive stocks on the market. Unbeatable revenue streams, cash and assets to grow through acquisitions, and some of the hottest items on the market. Their P/E is a ridiculous 10. By comparison, Google's is 25, Microsoft's is 15, and Amazon's is 3500. Samsung's is also low, 9.61. Of those 5, 4 control their own mobile ecosystem. The odd man out will eventually just be another HTC.

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9. Aeires (unregistered) posted on 15 Mar 2013, 12:44 3

You missed part of the point to the question. Apple's large wealth is partly associated to AAPL value, so when it drops, it's not good for Apple. They still have enough to weather some storms but losing total value like that is never a good thing.

Warren Buffet once advised Steve Jobs to buy back some of their stock to help maintain it's value. He was ignored, look how that played out. It's not Wall Street punishing Apple, it's sound business strategy.

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4. Droid_X_Doug posted on 15 Mar 2013, 11:24 6 1

Poor stale iOS UI. Even sheep get tired of the same-old-same-old after a while.

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10. akki20892 posted on 15 Mar 2013, 14:47 1

because Steve jobs is not here........they don't know how to run company......if steve jobs here right now then apple could be on good place .....!!!

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13. darkkjedii posted on 15 Mar 2013, 17:30 1

Actually this is what happens every year around this time, as anticipation for the new model grows. Lets just hope it's actually new this year, and not a rehash.

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2. quakan posted on 15 Mar 2013, 11:14 3 4

It'll be interesting to see what comes with the next gen iPhone.

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5. PhoneArenaUser posted on 15 Mar 2013, 11:35 2

And what is yours are expectations?

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7. DarkShadow posted on 15 Mar 2013, 11:58

it mean a cheaper phone

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11. davecann2 posted on 15 Mar 2013, 15:17

I'm really looking forward to what Apple is going to do next. Unfortunately, its looking like 2013 is a bust and the iPhone 5s is not much better then the iPhone 5 =(

Looks like I'm getting me a SGS4!!! Sorry Apple... I just cant wait any longer for you to get your sh!t together!

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14. darkkjedii posted on 15 Mar 2013, 17:31 2

Hi Dave

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15. davecann2 posted on 18 Mar 2013, 08:18

What up DK!

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12. rusticguy posted on 15 Mar 2013, 17:00

Basically this is a ploy to cover up the reduced demand for iPhone 5 ... same old story :)

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