Morgan Stanley: Apple's next iPhone to be slimmer, may include quad-mode LTE chip
Investment bank Morgan Stanley hinted on Friday that Apple's next-generation iPhone will be slimmer when it arrives later this year and could include a quad-mode chip from Qualcomm that would allow for 3G and LTE functionality across all "network flavors."
Apple will remain impervious to a broader decline in consumer demand throughout the technology industry through the release of its third-generation iPad in the first half of 2012 and the launch of a thinner iPhone later this year, analyst Katy Huberty wrote in a note to investors detailing takeaways from a recent trip to Asia.
Data points for Apple are "mostly positive," she said, as the company is expected to maintain unit shipments this quarter, compared to a 10 percent sequential decline from the December quarter in the broader market.
"Apple will also launch iPad 3 in H1 and a slimmer iPhone later this year," she wrote.
Huberty believes production for the next iPad will ramp up at the end of this quarter. She voiced expectations that Apple's next-generation tablet will have a higher resolution display.
As for Apple's next iPhone, Huberty said details on the device remained "sparse," but she believes the device will be ready at the end of the second quarter. The launch will depend on "manufacturing yields," she said, adding that she expects the next-gen iPhone to arrive in the third quarter "unless competition heats up."
According to her, new touch panel technology will enable Apple to make the device thinner. Huberty also claimed Apple is "considering" new casing materials.
The Cupertino, Calif., company also benefited in the December quarter from a decision to keep the iPad 2 on the market at a reduced price after the the third-generation iPad arrives, the analyst noted. Looking ahead to the March quarter, Apple's strength appears to be iPhone 4S driven, though signs also point to the iPad performing "better than seasonal" during the period.
Huberty said it appears that the next-generation iPhone will incorporate Qualcomm's quad-mode chip that would allow it to "run on all 3G and LTE network flavors," but she said it was "too early to know for sure." If Apple were to ink a deal with China Mobile, it would increase confidence that Apple would utilize the chip, she added.
"What is clear about iPhone 5 is that Apple and its supply chain are positively surprised by the demand for iPhone 4S, which increases confidence in strong sales for iPhone 5 later this year. Overall, the supply chain looks for stronger than market growth for both the iPhone (50%+ y/y vs. market 20-30%) and the iPad (20-40% growth, higher with a lower priced iPad 2)," she wrote.
Recent reports have hinted that Apple is in talks with carriers to release LTE-compatible iOS devices later this year. Apple is also said to be in negotiations with China Mobile and has reportedly given the world's largest carrier a "positive answer" on an future LTE iPhone compatible with its network.
Huberty's Asian sources suggested that Apple's strength will be the exception, rather than the rule, in the coming year. The tech supply chain is experiencing "worse than normal seasonality" during the first half of this year due to "macro pressures and back-end loaded product cycles," she said.
More specifically, the analyst cited weak sales in Europe, a seasonal demand drop in the U.S., limited technology/product cycles and "weakening commercial put pressure" in the first half of 2011, especially in the first quarter.
Though Apple's competitors in the PC industry expect the release of Microsoft's Windows 8 operating system to give lift to PC sales, Huberty cautioned that "visibility into pricing, a key determinant of growth," of such devices remains low. The analyst also said she was surprised by the "lack of HDD supply concerns" and expects prices to normalize by the end of the second quarter.
PC makers will need to determine pricing for ultrabooks in particular, Huberty said, noting that the laptop category's bill-of-materials needs to fall in order to hit a selling price that will attract high volumes. Even so, "it remains unclear when or if these price cuts can ultimately stimulate Ultrabook demand," she added. Earlier this week, analysts at Gartner said consumers hesitated to adopt ultrabooks in the fourth quarter of 2011.
Companies Huberty spoke to said they expect the first Windows 8 products to arrive in the middle of the third quarter of 2012, with ARM-based devices taking "longer to ramp to volume" because of software compatibility issues and additional R&D efforts. PC demand is likely to see "at least a modest uptick" following the release of Windows 8.
"Reasons for optimism include: 1) Initial Win 8 engineering feedback is positive, 2) Windows has more corporate support than Android and Apple, and 3) Most vendors expect Microsoft to provide free apps or even products to stimulate demand if necessary," she said.
Within the mobile industry, Huberty sees non-iPhone smartphone demand as having tapered off in recent weeks. She warned that Qualcomm could provide "sub-seasonal" guidance for its Mobile Station Modem chips in the second quarter of fiscal 2012 as a result of the slowdown in demand.
Comments
The Cupertino, Calif., also benefited in the December quarter from a decision to keep the iPad 2 on the market at a reduced price following the arrival of the third-generation iPad, the analyst noted. Looking ahead to the March quarter, Apple's strength appears to be iPhone 4S driven, though signs also point to the iPad performing "better than seasonal" during the period.
iPad 2? iPad 3? Benefited? December quarter?
Are we already in 2013?
iPad 2? iPad 3? Benefited? December quarter?
Are we already in 2013?
You're right that the article is really odd. Talking about the iPad 2 remaining at reduced prices in the past tense? Perhaps this one wasn't supposed to be published until April.
kinda like having a display with 600 ppi. what's the point? time to focus less on measuring contests that make no sense and focus on things that do. like screen technology. a super AMOLED plus high density display would be amazing. wish I could get a TVs made out of that stuff.
or maybe a new kind of battery that can play a week of video before dying.
that's the kind of stuff I would buy. not a phone that is 0.05mm slimmer.
Use as a camera has become a really big deal with smartphones, but, if they get significantly thinner, they'll become a pain to use as a camera. A significantly thinner IP4/S would start to become difficult to work with as a camera. The current form factor, with flat sides works very well in this regard.
Verizons recent "all future smartphones must have LTE" announcement (http://www.intomobile.com/2012/01/12...o-feature-lte/) pretty much guarantees the LTE part of this report unless Apple have got themselves some so far unannounced exception to this ruling.
Maybe Apple will do something similar. Decide the ideal thickness based on ergonomics and then just cram it full of battery. I think the extra weight would be fine, at least until we get those Lithium Ion Graphene batteries into production.
Thinner and bigger don't necessarily mean better, unless your perspective is entirely unsophisticated. The IP4/S form factor is nearly perfect, and I think it could last another few generations. (It may not, but it could.) We all know the downsides of bigger -- i.e., the phone becomes a pain to carry around and use -- but, thinner, at least siginificantly thinner, which might sound like a good thing, isn't really either.
When I hold something, I want to feel it. I see no benefit in going any thinner than the top phones are already.
I think motorola made the right move by slightly increasing thickness of Razr Maxx giving significantly improved battery life (21 hrs talk time). Much more important than being 0.5 mm thinner than your competition IMO.
iPhones already have a great battery but it could be even better if they do not get caught in a battle for the thinnest.
Verizons recent "all future smartphones must have LTE" announcement (http://www.intomobile.com/2012/01/12...o-feature-lte/) pretty much guarantees the LTE part of this report unless Apple have got themselves some so far unannounced exception to this ruling.
"Ruling"? It's a company. They have absolutely no legal control over anything they say. Apple can do whatever the frick they want.
Tell me something I don't freakin know.
Duh.
Never understood the obsession with ultra thin. I hope phones don't continue to compete on that front as phones are plenty thin now
Whatever the next generation iPhone looks like, everyone will still love it unless Apple's designers make some unprecedented mistake or something.
Personally, I could go for a little thinner. If the entire phone was only as thick as the antenna band, (around 1/3 thinner), I think that would still be plenty thick enough. It's likely to have the same weight anyway, making it feel good in the hand.
If they made the screen the same size but edge to edge, it would also be about 1/4 inch smaller in height and width which wouldn't be a bad thing IMO.
The only thing I really hope they don't do, which I would see as a terrible "mistake" is to make it look like a little iPad (as in 90% of all the iPhone 5 mockups), with the sharp edges, and being so thin that it would be hard to hold. That is an iPhone that I simply would not buy and I don't think I'm alone on that.
I can't imagine what drives blogs to continually put out the idea that it will have an aluminium back and essentially look like a tiny iPad unless it's just pure laziness and a lack of photoshop skills.