8GB iPhone 5c, $399 'iPad 4' seen having 'slight positive' effect on Apple's March, June quarters

in AAPL Investors edited March 2014
With Apple making slight adjustments to its iPhone and iPad lineups this week, the new, cheaper device offerings are projected by one analyst to have only a minor effect on the company's bottom line.

Gene Munster of Piper Jaffray sees Apple's new internationally available 8-gigabyte iPhone 5c, as well as the relaunched fourth-generation iPad for $399, having a "slight positive" benefit for Apple over the next two quarters. In particular, the new low-end iPhone 5c, priced between the entry-level iPhone 4s and the 16-gigabyte iPhone 5c, is "unlikely to drive more significant upside," he said in a note to investors.

Last year, Apple experimented with lower pricing, cutting the price of the then-entry-level iPhone 4 by about 15 percent in emerging markets such as China and India. This price cut is believed to have helped Apple beat iPhone unit expectations in the June 2013 quarter by 18 percent.
Gene Munster of Piper Jaffray believes Wall Street estimates for Apple's June quarter, which call for 10% growth, will drift lower before the company reports those results.
But Munster doesn't believe this new, lower capacity iPhone 5c will have the same level of impact this year, calling its launch "ultimately irrelevant" for the company's June quarter.

A bigger concern for him are consensus estimates for Apple's June quarter. He said that Wall Street currently expects the company to report $38.7 billion in revenue for the three-month period, which would represent 10 percent year over year growth -- a number Munster believes is too high.

"Given that there are no meaningful changes to the company's product line-up or identifiable seasonal trends heading into June, we believe it is unlikely we see the significant acceleration the Street is currently expecting," Munster wrote.

The analyst said he believes Wall Street's June estimates will eventually come down ahead of when Apple actually reports its results for the quarter. And he doesn't expect that to have much of an affect on the stock price, as he believes by that time hype will be building for Apple's anticipated fall product launches.

Apple launched the new 8-gigabyte iPhone 5c on Tuesday, but only in select markets around the world, including China, the U.K., France, Germany and Australia. Notably absent from the list is Apple's home country of the U.S.

Also this week, the company discontinued its aging iPad 2, and replaced it at the $399 price point with a resurrected fourth-generation iPad with Retina display. That means Apple's entire iPad lineup now uses the Lightning connector, while the first-generation iPad mini, priced at $299, is the only non-Retina tablet sold by the company.

Piper Jaffray has maintained its "overweight" rating for AAPL stock, with a price target of $640.


  • Reply 1 of 8
    512ke512ke Posts: 782member

    If Munster thinks 38.7B is too high, bet on low!


    I predict the opposite of whatever he says.

  • Reply 2 of 8

    This Gene Munster guy has a history, as do the other analysts.  It would be nice if AppleInsider kept a scorecard on the analysts who make Apple forecasts, and then linked to a table of their history whenever they make a new prediction.  Because now and then they might actually get something right, but for the moment I don't believe anything they say.  In my opinion, giving an analyst's prediction, absent evidence of the analyst's veracity, is non-news at best, and possibly market manipulation at worst.

  • Reply 3 of 8
    solipsismxsolipsismx Posts: 19,566member
    512ke wrote: »
    If Munster thinks 38.7B is too high, bet on low!

    I predict the opposite of whatever he says.

    So 7.83 billion? :p
  • Reply 4 of 8
    512ke512ke Posts: 782member

    haha YOU bet on 7.8 billion, Solipsism.


    I get my number by taking a graph of iPhone sales since the beginning, and using a ruler to draw a line to project the steady upward line indicating sales over time.


    It's been pretty dang accurate so far.  Who knew that a dollar plastic ruler could be a more useful investment tool than Gene Munster et all?

  • Reply 5 of 8
    cash907cash907 Posts: 893member

    Highly doubt the gimped version of the already underselling 5C will have much effect, but the iPad 4 at $399 is a great deal. Pity it wasn't around during the holidays, but it should see a nice bump in late spring/early summer, what with Mother's Day, Father's Day, and graduations all hitting in that two month span.

  • Reply 6 of 8
    solipsismxsolipsismx Posts: 19,566member
    cash907 wrote: »
    ….the already underselling 5C…

    I'm curious how many smartphones in its class you think have sold more units or made more profit than the 5C for its time on the market.
  • Reply 7 of 8
    What no one is considering is that AAPL wil be rolling out a matching color iWatch for those 5c phones. This lower gig phone will allow younger buyers an parent throughout the world to buy these at at either cost point or as a package. Hello Christmas sales.
  • Reply 8 of 8
    dasanman69dasanman69 Posts: 13,002member
    solipsismx wrote: »
    I'm curious how many smartphones in its class you think have sold more units or made more profit than the 5C for its time on the market.

    Last sales rankings I saw had it at the number 3 spot on the major carriers just like every previous model iPhone before it, so it beats everything except the Samsung Galaxy du jour.
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