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Citing iPhone 5s yields & iPhone 5c pricing, Jefferies lowers Apple target to $425

post #1 of 139
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Apple's addition of a biometric sensor to the iPhone 5s may very well have differentiated its new high-end devices from its peers and predecessors, but apparent unit production issues have caused one firm to lower its price target on Apple stock.



Global investment banking firm Jefferies released a report on Friday that lowers drops its price target for shares of AAPL from $450 to $425. Jefferies' own channel checks indicate that Apple suppliers have begun receiving build plan cuts, indicating that Apple will be producing perhaps seven million fewer iPhone 5s models in the fourth quarter than had previously been expected.

The firm places the blame on two factors, one of which is Touch ID. Jefferies' channel checks indicate that production yields on the fingerprint sensor Apple included in the 5s "have been terrible."

The other technological improvements in the device, like the M7 motion coprocessor, are said to be providing no problems. The A7 processor is reportedly made using the same process as its predecessor, leaving the Touch ID sensor as the likely culprit.

Jefferies' assessment jibes with previous statements from well-connected KGI Securities analyst Ming-Chi Kuo. Kuo has been predicting short supply of the iPhone 5s since July, due to production issues surrounding the Touch ID sensor. Kuo, though, expects production to pick up after an initial period of limited availability.

The other factor in Jefferies' price downgrade is the price point Apple chose for its iPhone 5c. The idea that Apple was preparing a lower-cost phone had been generally accepted since early this year, but analysts, investors, and Apple fans were anxious to see just where the iPhone maker would price its new, polycarbonate-backed device.

Jefferies argues that the 5c is "priced like Apple's prior generation handsets rather than to a new level," essentially saying that Apple needed to go even lower on price.

The new report is the latest in a string of downgrades from analysts disappointed that Apple did not step more aggressively into the mid-tier pricing market with the iPhone 5. Many market watchers had been hoping that Apple would price the device around $400 off-contract, and many of those subsequently downgraded the stock when Apple did not do so. Credit Suisse, Bank of America Merrill Lynch, and UBS all cut their ratings on AAPL from "buy" to "neutral."
post #2 of 139
And so the analyst spoke: thou shall be punished for being innovative!
Yeah, well, you know, that's just, like, my opinion, man.
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Yeah, well, you know, that's just, like, my opinion, man.
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post #3 of 139
"Jefferies' channel checks indicate that production yields on the fingerprint sensor Apple included in the 5s "have been terrible.""

Yeah, right. "Jeffries", you're an idiot.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #4 of 139
Here we go again. Last year the 5 was the most difficult phone to mass produce.
 
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post #5 of 139

Quick everyone dump your stock! Lets help this market manipulator buy more shares.

post #6 of 139
Somehow, I don't believe that they're going to short AAPL.
post #7 of 139
Quote:
Originally Posted by pazuzu View Post

Here we go again. Last year the 5 was the most difficult phone to mass produce.

Yet the yields on troll analysts are at an all time high.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #8 of 139
Quote:
Originally Posted by AppleInsider View Post

Global investment banking firm Jefferies released a report on Friday that lowers drops its price target for shares of AAPL from $450 to $425. 

Two things, first "lowers drops" is a term I'm not familiar with.

 

Second, this explains why no pre-ordering of iPhone 5S.  They don't have enough to fulfill pre-order demand. 

 

I hope they get it resolved soon. I want my iPhone 5S now!

post #9 of 139

That would explain why Apple is taking pre-orders for the 5c but not the 5s.

 

Unless someone has another theory?

post #10 of 139
Quote:
Originally Posted by RichL View Post

That would explain why Apple is taking pre-orders for the 5c but not the 5s.

Unless someone has another theory?

Do you really believe a "serious" production issue would be solved in one week? Jeffries knows nothing.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #11 of 139

425??? that's their target for a companies that makes more money from phones than everyone else together, more from computers than the top5 oems together, 10x more from iPads than anyone else together?

 

What a bunch of incompetent, ignorant, foolish and stupid people.

 

Same for AI to give them their 15 minutes.

post #12 of 139
Quote:
Originally Posted by pazuzu View Post

Here we go again. Last year the 5 was the most difficult phone to mass produce.

 

... and, although the 5 sold well, there were inventory shortages and Apple could possibly have sold even more.

na na na na na...
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na na na na na...
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post #13 of 139
Quote:
Originally Posted by RichL View Post

That would explain why Apple is taking pre-orders for the 5c but not the 5s.

Unless someone has another theory?

That and wanting data on which colors are popular so they know better how to stock the stores. For instance the yellow version now has a shipping date of 9/25. The others are still 9/20.
post #14 of 139
Quote:
Originally Posted by SpamSandwich View Post


Do you really believe a "serious" production issue would be solved in one week? Jeffries knows nothing.

 

Unless they want to ensure retail inventory on introduction day.

na na na na na...
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na na na na na...
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post #15 of 139
I was hoping to get the new BMW M6 for $19,999
post #16 of 139
Apple is doomed!

/s
post #17 of 139
Quote:
Originally Posted by Rogifan View Post


That and wanting data on which colors are popular so they know better how to stock the stores. For instance the yellow version now has a shipping date of 9/25. The others are still 9/20.

 

Yellow??!! That was my least favorite color followed by green.

 

OK... to make my theory correct I'll just pretend that Apple agreed with me and didn't make too many of the yellow phones.

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na na na na na...
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post #18 of 139
So talk the price down prior to launch then buy the shares and then talk the shares up afterwards and sell.

? Do Ferrari make and sell a compact entry level car to compete with the Nissan Micra (or equivalent) coz I would guarantee I would buy one if they did. Do Ferrari want me as a customer, HELL no !! to much bother
post #19 of 139

Somebody wants to buy cheap...

post #20 of 139

Jefferies is Peter Misek, right? Google /misek track record/.

post #21 of 139
Quote:
Originally Posted by island hermit View Post

Yellow??!! That was my least favorite color followed by green.

OK... to make my theory correct I'll just pretend that Apple agreed with me and didn't make too many of the yellow phones.

Yellow is a favorite with Philipinos. Remember Corazon Aquino only wore yellow. That's a lot of iPhones.
 
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post #22 of 139

Look at his previous records on AAPL and BBRY and then even think about considering his BS :lol:

 

I love the fact that such people exists. Contrarian trades work easily!

post #23 of 139
Quote:
Originally Posted by jonl View Post
 

Jefferies is Peter Misek, right? Google /misek track record/.

 

Misek is a moron with a lousy track record.  He has always been negative on AAPL.  Probably in the pocket of the shorts.

post #24 of 139

Buy APPL

post #25 of 139
Odd to release the 5s to every country when they have production problems. Seems like the easiest way to hide that would be to first release to the US then slowly add additional countries.

But whatever, I think people are getting used to Apple not executing crisply on new products. We'll see for sure in a couple weeks what supply and demand are really like.
post #26 of 139
These analysts want an 'innovative' $400 phone - as good as a top-of-the-line iPhone but low-priced. And by the way, keep those margins up at the same time!

Seriously, the difference is $150 between their price and the actual no-contract 5c price (which helps Apple to meet margin expectations). You still have to get service somewhere, and that's where the real cost resides. If I am still willing to pay $100 a month for enough minutes, data, and messages to satisfy my needs, do they think that I am sweating it over the $150? If my monthly service costs were $20, then the $150 would make a difference.

There are lot of ways to pay for a smartphone these days and lot of carriers. But anybody who doesn't have $549 probably doesn't have $400 plus the service cost to use a smartphone. In the end, a smartphone is still a luxury and not a necessity.
post #27 of 139
If Apple had introduced the iPhone 5C at $400.00 as Jeffries was expecting, Jeffries would have still lower it's Apple target using the explanation that Apple's margins were hit and the 5C would canibalize 5s sales. Apple was never going to win here.

Thankfully, the folks running Apple have had an unshakeable focus at keeping Apple out of the race to the bottom!
post #28 of 139
Quote:
Originally Posted by island hermit View Post

Yellow??!! That was my least favorite color followed by green.

OK... to make my theory correct I'll just pretend that Apple agreed with me and didn't make too many of the yellow phones.

My sister just got an email on the new iPhones and forwarded to to me asking why Apple chooses such ugly colors. I hate to say it but it could be a swing and a miss color wise.
post #29 of 139
This "analysis" makes no sense: yield on sensors is too low to meet demand, so therefore apple is cutting orders? Damn these smart guys are dumb.
post #30 of 139
Quote:
Originally Posted by spaceage View Post

This "analysis" makes no sense: yield on sensors is too low to meet demand, so therefore apple is cutting orders? Damn these smart guys are dumb.

I think he's saying they don't need some of the other phone parts if they don't have enough touch sensors to complete devices. Therefore some of the other component orders are being cut.
melior diabolus quem scies
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melior diabolus quem scies
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post #31 of 139
Quote:
Originally Posted by squareback View Post
 

Buy APPL

 

That way you will lose less money than if you bought AAPL.

post #32 of 139
Yellow sold out preorder. Wonder what the production numbers were.
post #33 of 139
Quote:
Originally Posted by leavingthebigG View Post

If Apple had introduced the iPhone 5C at $400.00 as Jeffries was expecting, Jeffries would have still lower it's Apple target using the explanation that Apple's margins were hit and the 5C would canibalize 5s sales.

 

That argument makes no sense. If I'm not going to buy an 5C at $550 but I would buy it at $400, how is that cannibalizing 5s Sales?

post #34 of 139
Quote:
Originally Posted by Interdyne View Post

Quote:
Originally Posted by AppleInsider View Post

Global investment banking firm Jefferies released a report on Friday that lowers drops its price target for shares of AAPL from $450 to $425. 
Two things, first "lowers drops" is a term I'm not familiar with

That did pop out; just delete one of those words. Happens all the the time in this site.
Quote:
Second, this explains why no pre-ordering of iPhone 5S.  They don't have enough to fulfill pre-order demand. 

Or could it be that they have so many they don't even need to know how many people want whatever model.? Pre-ordering 1 week in advance isn't going to solve a shortage problem anyhoo.
Quote:
I hope they get it resolved soon. I want my iPhone 5S now!

Hear hear!
Quote:
Originally Posted by RichL View Post

That would explain why Apple is taking pre-orders for the 5c but not the 5s.

Unless someone has another theory?

See above ^
Quote:
Originally Posted by squareback View Post

Buy APPL

I'm failing to see what a petrol company has to do with this.
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post #35 of 139
Quote:
Originally Posted by scotttrader View Post

Yellow sold out preorder. Wonder what the production numbers were.

 

Interesting! Because I still see delivery date 9/20 for yellow iPhone 5C as well.

post #36 of 139
Why do people keep saying that yellow is sold out?

I just went to the Apple store and it shows all five colors as being delivered on 9/20.
post #37 of 139
Quote:
Originally Posted by PhilBoogie View Post
 
Quote:
Originally Posted by Interdyne View Post
 
Quote:
Originally Posted by AppleInsider View Post

Global investment banking firm Jefferies released a report on Friday that lowers drops its price target for shares of AAPL from $450 to $425. 
Two things, first "lowers drops" is a term I'm not familiar with

That did pop out; just delete one of those words. Happens all the the time in this site.
Quote:
Second, this explains why no pre-ordering of iPhone 5S.  They don't have enough to fulfill pre-order demand. 

Or could it be that they have so many they don't even need to know how many people want whatever model.? Pre-ordering 1 week in advance isn't going to solve a shortage problem anyhoo.
Quote:
I hope they get it resolved soon. I want my iPhone 5S now!

Hear hear!
Quote:
Originally Posted by RichL View Post

That would explain why Apple is taking pre-orders for the 5c but not the 5s.

Unless someone has another theory?

See above ^
Quote:
Originally Posted by squareback View Post

Buy APPL

I'm failing to see what a petrol company has to do with this.

Takes petroleum to make plastics? Hehe

post #38 of 139
Quote:
Originally Posted by Apple ][ View Post

Why do people keep saying that yellow is sold out?

I just went to the Apple store and it shows all five colors as being delivered on 9/20.

I think it was just the yellow 16GB.

EDIT: You're right. The yellow 16gb still shows the 20th. Perhaps it was just Sprint with no more yellow 16GB ones?
melior diabolus quem scies
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melior diabolus quem scies
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post #39 of 139
Quote:
Originally Posted by Gatorguy View Post


I think it was just the yellow 16GB.

 

Yellow 16 GB has delivery date of 9/20 as well. Just checked. Not sure if the delivery date depends on the region though!?

post #40 of 139

 Funny I don't see Mercedes, Ferrari, Jaguar etc. producing cheap autos to gain market share. They have an image of high quality products to maintain just like Apple wants to keep it's image of delivering high quality top of the line products. Apple will never release crap products just for the sake of market share. Apple continues to rake in billions in profit with their current market share while other companies struggle to make much profit with their cheap crappy phones. Apple may use the iPhone 4 and 4s as entry level or they can always lower the price on the 5c if need be. These so called analyst are a joke and stock manipulators. There's a shortage of the 5s so Apple decided to offer the phone in China, get real, if there is a shortage it will be from the huge demand not production problems. Every single phone Apple comes out with we always get the stupid production problem rumors. Funny how no other company seems to get these rumors.

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