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Apple reportedly slows iPhone orders increases iPad orders

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					Apple reportedly slows iPhone orders, increases iPad orders

Sterne Agee analyst Shaw Wu said in a note to investors on Tuesday that
Apple has reduced iPhone orders by between 20% to 25% from the 35.1
million units the company shipped in the March quarter. Wu now expects
shipments of between 26 million and 28 million iPhones, lower than the
Street’s consensus of between 30 million and 31 million units. The
analyst also noted that Apple has an estimated 8.6 million iPhones in
channel inventory, 2.6 million of which were added in the most recent
quarter, allowing the Cupertino-based company to achieve supply-demand
balance of between four to six weeks.
“From our understanding, the reason for the reduction is not demand
related but rather due to the upcoming 6th generation iPhone refresh
likely in the September-October timeframe,” Wu explained. “It appears
that AAPL is opting to be conservative with its suppliers to factor in a
potential 2-quarter pause ahead of the refresh and also to manage
inventory. We believe this helps explain why its June quarter guidance
was somewhat more conservative.”

The analyst went on to state that the opposite is occurring with Apple’s
iPad tablet, which is seeing increased build plans. Shipments of the
device were previously held back due to supply constraints on its new
Retina Display, although it has been “greatly improved with an additional
supplier.” Wu believes that this will help Apple to better meet the
strong demand for its iPad.

For the June quarter, Wu reduced his iPhone forecast from 28 million
units to 27 million, and raised iPad shipment expectations from 14
million to 15 million units. Due to improved iPad profitability, the
analyst is increasing his gross margin assumption from 42.5% to 43.5% and
forecasting $36.1 billion in revenue and $10.16 in EPS. Wu reiterated his
Buy rating on shares of Apple stock, as well as his $780 price target.

				
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Description: Apple reportedly slows iPhone orders increases iPad orders