Nomura cuts target on Apple to $530 from $660; blames Apple iPhone margins

Nomura cuts target on Apple to $530 from $660; blames Apple iPhone margins
Tuesday morning, Stuart Jeffrey, an analyst with Japanese brokerage house Nomura, reiterated his neutral rating target for the stock while lowering his target price to $530 from $660. The analyst's concern is that Apple iPhone gross margins have peaked at the current 55% and could drop to 40% which is the historical peak for mobile handset manufacturers. Jeffrey sliced his earnings forecast for Apple to $45.54 a share in fiscal year 2013, down from his older estimate of $51.68 a share. For the 2014 fiscal year, the analyst sees Apple scoring a profit of $49.69 a share, down from his original estimate of $55.58 a share. Jeffrey sees Apple reporting a down year in 2015 with profits of  $48.99 a share, down from an earlier $54.90 a share forecast and off from 2014's expectations.

The analyst says there isn't much Apple can do to turn things around in the short term and that even the introduction of an Apple iPhone 5S and a Apple iPad mini with a Retina display would not add much to demand. He does add that the downside risks are limited by Apple's low P/E ratio, or the possibility of a dividend increase. Some factors that could potentially boost the stock like a new Apple iPhone release or a refresh of iOS, won't happen until the second half of the year. The release of a low-priced Apple iPhone would only serve to lower margins which would be a negative for the stock. Jeffrey calls the release of OS7 critical but added that management changes at the company might limit any new features of the OS build.

Apple is currently trading at $490, down $10 on the day.

source: Forbes



1. brar.arsh

Posts: 202; Member since: Sep 12, 2012

Fruit feeling the Heat of Green Robot.. :D

3. blingblingthing

Posts: 978; Member since: Oct 23, 2012

Maybe less time talking to the lawyers and more talking to the IOS developers would help things.

15. rusticguy

Posts: 2828; Member since: Aug 11, 2012

This is impact of backfired Thermonuclear Strategy.

27. blingblingthing

Posts: 978; Member since: Oct 23, 2012

Or bringing an iPhone to a smartphone fight.

35. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

I think Apple is in a worse position than a matter of margins would indicate. Apple has a fundamental problem with its UI. Imagine if the Android community were stuck (in its entirety) on say, Froyo. That is the problem for Apple with iOS. Users aren't faced with a compelling reason to go out and buy a new iToy, since they just got one 6 (or whatever) months ago, nothing has changed. gMaps has solved the problems of iMaps. iUsers are seeing how other flagship phones are shipping with 4.5+ inch displays and the argument about not being able to use a phone one-handed with a display larger than 4 inches is wearing thin. The problem for Apple is stagnation. Stagnation of its sales engine is much more serious than margins being lower than desired.

2. menny07

Posts: 89; Member since: Dec 13, 2012

Its all over the news. Apple isn't "cool" anymore, if you say so. People are becoming aware of other great options. iOS is just so stagnated people are getting tired of it.... That's why SOFTWARE makes all the difference. Windows is charging and Android keeps on innovating.

4. McJobs

Posts: 107; Member since: Jul 08, 2012

People want innovation from the leader in innovation, not taller iPhone 4/4S...

5. Tones

Posts: 77; Member since: Aug 23, 2012

Apple tried to crush the competition rather than rising to the competition and raising their game. And i hope they pay for that.

41. LionStone

Posts: 1048; Member since: Dec 10, 2010

Payback in effect... :-)

6. davecann2

Posts: 460; Member since: Mar 15, 2011

I am an iOS user who, for months now, have been considering jumping ship to Android (GS3). IMO... the iOS has become boring and dated. The new features that Apple crams into every iteration are just too minor and useless for me to make a switch from my current iPhone 4 to the latest 5. I need more... This is what needs to happen... - A complete refresh of iOS is a MUST! The lame notification system and old school look has to be retired and reworked. - A larger screen; The jump to a 4" display was a lame attempt at competing with lager 4+" displays. IMO it failed.. there really isn’t that much of difference to make it worth the hype. - Better integration with ? . Android's integration with Google is simply awesome. Enough Said. ... I'm not completely convinced I want to just ship just yet but I am seriously considering in in the next few months if Apple doesn’t come out swinging with its next release.

21. Mxyzptlk unregistered

Some of your points are very off. 1. Actually ios integrates well with the iPhone. Google services are only fully integrates on the nexus line of phones. 2. Why fix what was never broken? iOS is more intuitive than it ever was before. 3. Large screens aren't always the best. Everything you said is just your own pov and not a fact. I've talked to a lot of people and many if them enjoy ios as it is.

30. blingblingthing

Posts: 978; Member since: Oct 23, 2012

1. Both those points both of you made are opinions. You both can give better supporting arguments. 2. While it is intuitive, it is on that android level. A lot of things on android just seem to take fewer clicks. The way it multitasks and can close apps, a central back button , home and multitask button, a swipe keyboard , removing unwanted notifications. Widgets etc. 3. If a large screen isn't always best , that means a small isn't always best either. Plus, the only people saying that sort of thing is people that haven't used bigger screens.

42. LionStone

Posts: 1048; Member since: Dec 10, 2010

I showed some new features to Android notifications to my apple friend and all he replied was, "oh I'd never use that!" And I replied back, "yes you would, if apple had it".

34. Jonathan41

Posts: 532; Member since: Mar 22, 2012

No doubt. No one is calming that there aren't people that love iOS. Nothing wrong with that. BTW, You're always so defensive about Apple. When generally compared to other OS's iOS is a lot less immersive because, of it's simplicity and boring compared to the other options on the market. I've been saying it for years now but iOS, is an app drawer. Any Android or WP user will tell you, app drawers are boring lol. iOS is a operating system for people that are new to smartphones. It's the high school of OS's. When you first start learning it you're like this is awesome but, after you've seen everything you're ready to move on to the next level. Windows Phone is college and Android is a lucrative career.

37. davecann2

Posts: 460; Member since: Mar 15, 2011

Good and valid opints. Let me just say that I absolutely love iOS and my iPhone but have become bored of using it. I am not playing down how well the OS performs and works in its own simplicity. I'm just saying that I need something fresh to keep my interset... I have co-workers that have showing me what their Android can do that my iPhone cant and I must say its impressive and not gimmicky. I love the intergration with Google and its use of notifications.... I just strongly feel that Apple is lossing ground quickly and keeps dishing out the same stuff every release. I think many users feel the same as me.

43. LionStone

Posts: 1048; Member since: Dec 10, 2010

#1 is incorrect... I do have full integration capabilities with Google services but I do not have a Nexus device, I have an HTC DROID DNA. In other words, one doesn't have to have a Nexus to have full Google integration.

44. gallitoking

Posts: 4721; Member since: May 17, 2011

I am happy with iOS

7. ogy_dogy

Posts: 453; Member since: Jun 29, 2012

You goin down down baby...

8. xtremesv

Posts: 299; Member since: Oct 21, 2011

Finally a sensible analyst. Apple lost its touch, everyone can see that.

46. ZeroCide

Posts: 816; Member since: Jan 09, 2013

First they loose iphones now touches!!!

9. darkkjedii

Posts: 31346; Member since: Feb 05, 2011

People can I ask a question, and I hope for intelligent responses? Why do u want to see apple fail, or do u?

11. davecann2

Posts: 460; Member since: Mar 15, 2011

I definetely want Apple to succeed... I love Apple products and their support is simply unmatch. WIth that said... Apple has fallen behind Android in inovation.

13. darkkjedii

Posts: 31346; Member since: Feb 05, 2011

Agreed Dave 100%

38. davecann2

Posts: 460; Member since: Mar 15, 2011

Thanks Darkjedii, If I recall you are an iPhone user like me. I appreciate user who are not fanboys much like you and I. We both respect and enjoy Apple products but also have an interest for other technologies.

16. -SEUL8TR-

Posts: 113; Member since: Jan 13, 2013

They don't deserve to be on the top, they should belong where Nokia and BB stands, rotten Apple!

26. chaoticrazor

Posts: 2347; Member since: Aug 28, 2012

tbh neither does samsung motorola, HTC, Sony and Nokia deserve to rise as both samsung and apple get put in there place either way though apple is here to stay so all you annoyed fanboys should get out of your head that they will die

28. -SEUL8TR-

Posts: 113; Member since: Jan 13, 2013

Apple won't stay here for long from $750 they have tumbled to $ 500 mark, this is really very great news, these bullies and cowards needs to taught a lesson! Fanboys, you must be an Apple cult or hippie z0πbi£$„...?

33. darkkjedii

Posts: 31346; Member since: Feb 05, 2011

U can do better than that

39. chaoticrazor

Posts: 2347; Member since: Aug 28, 2012

lmao you are such a mindless fanboy that just follows the hating trend ''hey look at me i hate apple too guys'' is that what you scream and shout kid? apple are in a position where they can turn it all around. the problem is there arrogance which apple users admit as most apple users now are more reasonable then the android swarm. couple apple trolls left but they are taken seriously ''you must be an Apple cult or hippie z0πbi£$'' nah kid im a tech lover whatever i want i get regardless of os or brand etc. i dont feel the nned to be a complete idiot and act like a product is the devil reborn so come back to me when you grow up

32. darkkjedii

Posts: 31346; Member since: Feb 05, 2011

Exactly bro

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