iPad 2 constraints 'significantly improved' as Apple's supply woes ease
iPad 2 production restraints that affected Apple last quarter are said to have "significantly improved," allowing for improved availability of the in-demand tablet.
Analyst Shaw Wu with Sterne Agee said Friday that Apple has found better yields in iPad 2 production through retooling and conversion of more overseas production lines. These changes have gone a long way in addressing the supply issues Apple experienced last quarter.
But he also cautioned that Apple is along way from meeting its internal goals for iPad 2 production. Previous rumors suggested Apple could ship as many as 45 million iPad 2 units this year, though predictions have dropped since Apple's last quarter fell short of expectations for iPad sales.
"From our understanding, [Apple] still has a ways to hit the [second half] goal of 3-4 million units per month but getting closer," Wu wrote.
Accordingly, Wu has increased his estimates for iPad sales in the current, third fiscal quarter of 2011 for Apple. He now sees the company selling 6.8 million iPads, up from his previous prediction of 5.9 million.
Wu also increased his estimated iPhone sales to 17 million, up from 16 million. He said iPhone demand appears to be holding up better than expected, thanks to strong adoption of the white iPhone 4 and strong sales on Verizon.
Wu also increased his projected Mac sales to 3.9 million from the quarter, up from 3.83 million. He is also assuming a new, higher gross margin of 39 percent, increased from 38.3 percent, due to improved iPad yields and higher iPhone sales.
Finally, he's also increased Sterne Agee's 12-month price target for AAPL stock to $460, up from the previous prediction of $445.
Analyst Shaw Wu with Sterne Agee said Friday that Apple has found better yields in iPad 2 production through retooling and conversion of more overseas production lines. These changes have gone a long way in addressing the supply issues Apple experienced last quarter.
But he also cautioned that Apple is along way from meeting its internal goals for iPad 2 production. Previous rumors suggested Apple could ship as many as 45 million iPad 2 units this year, though predictions have dropped since Apple's last quarter fell short of expectations for iPad sales.
"From our understanding, [Apple] still has a ways to hit the [second half] goal of 3-4 million units per month but getting closer," Wu wrote.
Accordingly, Wu has increased his estimates for iPad sales in the current, third fiscal quarter of 2011 for Apple. He now sees the company selling 6.8 million iPads, up from his previous prediction of 5.9 million.
Wu also increased his estimated iPhone sales to 17 million, up from 16 million. He said iPhone demand appears to be holding up better than expected, thanks to strong adoption of the white iPhone 4 and strong sales on Verizon.
Wu also increased his projected Mac sales to 3.9 million from the quarter, up from 3.83 million. He is also assuming a new, higher gross margin of 39 percent, increased from 38.3 percent, due to improved iPad yields and higher iPhone sales.
Finally, he's also increased Sterne Agee's 12-month price target for AAPL stock to $460, up from the previous prediction of $445.
Comments
They could shit the goals indeed if these measures don't hold up!
"From our understanding, [Apple] still has a ways to shit the [second half] goal of 3-4 million units per month but getting closer," Wu wrote.
That's pretty ... crappy understanding of the situation. I mean ... holy ship!
Apple shits 90% of tablets. RIM and others are responsible for only 10% of the shit.
Oh, how we can go on
Apple will produce whatever it can produce and a week or two of internal changes could make all the difference in the world for production numbers. Apple's share price is being artificially locked within a certain range and there isn't anything that's going to change that. Setting target prices is absolutely of no use for Apple shareholders if the value is being determined by hedge funds and day traders.
I for one would like to see these AAPL price predictions start to manifest themselves! It's as if something is artificially holding AAPL down.
There are quite a few things holding AAPL down -- expiring options. From tradershuddle.com:
There are quite a few things holding AAPL down -- expiring options.
Options gaming is getting pretty abusive. It was bad when it always killed January numbers, but now it is every Friday with the cursed weekly options!
I never thought I would be one to say this... but it is time for AAPL to have a 10:1 split. That is the only way to beat this stupid manipulation to get options to the Max Pain point.
http://www.engadget.com/2011/05/20/e...al-could-affe/
Options gaming is getting pretty abusive. It was bad when it always killed January numbers, but now it is every Friday with the cursed weekly options!
I never thought I would be one to say this... but it is time for AAPL to have a 10:1 split. That is the only way to beat this stupid manipulation to get options to the Max Pain point.
Please explain how that would stop manipulation. Won't the max pain points just adjust
to lower strike prices of options?
Consumers are getting ripped off like crazy!
Almost 40% profit margin?
Consumers are getting ripped off like crazy!
Yeah! They should buy those much cheaper Android tablets! Oh, wait....
BTW, "gross margins", as mentioned in the story, are not the same as "profit margins."
BTW, "gross margins", as mentioned in the story, are not the same as "profit margins."
A common misunderstanding too.
http://www.investorwords.com/2245/gross_margin.html
Please explain how that would stop manipulation. Won't the max pain points just adjust
to lower strike prices of options?
My thought is that the pressure can't be maintained in the same way as the percentage delta in gaps between strike prices are smaller. It also makes options investing less attractive to the retail investor.