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

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.

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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