Tue, Sep 03, 2013 - Page 14 News List

Barclays slashes iPhone shipments forecast for Q3

SIZE DOES MATTER:The UK bank said the cut was due to the Apple phones’ smaller screens and slower initial production, but predicted a Q4 rebound in shipments

Staff writer, with CNA

British banking group Barclays PLC has lowered its shipment forecasts for Apple Inc’s next-generation iPhones by as much as 20 percent because of slower initial production and smaller screens than most of Google Inc’s Android phones.

Barclays now expects iPhone shipments — including the iPhone 5S and 5C — in the third quarter will be 28 million to 30 million units less than its initial projection of 35 million to 37 million units.

However, iPhone shipments will likely bounce back to between 54 million and 56 million units in the fourth quarter as the year-end holiday shopping season approaches, the bank said in a note to clients on Friday.

“We estimate that the initial product ramp might be slower than expected. The iPhone 5S yield rate might be an issue,” Hong Kong-based Barclays analyst Kirk Yang (楊應超) wrote in the note. “In addition, some telecom operators might be hesitating to over-order both 5S/5C models on account of its 4-inch screen size, which is smaller than today’s mainstream 4.5 inches to 5 inches that the market demands.”

Barclays said Apple is likely to hold a press event on Tuesday next week in San Francisco to launch the two new iPhone models.

The high-end iPhone 5S is expected to feature a fingerprint function, faster processor and a dual LED flashlight at the back of the phone, but its screen size is likely to remain at 4 inches, the same as the current iPhone 5, the bank said.

A lower-priced model, the iPhone 5C, is similar to the iPhone 5 with a plastic casing, and is expected to be sold for US$350 to US$400 without a contract, according to Barclays.

The iPhone 5S will be assembled by Taiwan’s Hon Hai Precision Industry Co (鴻海精密), while the iPhone 5C will be split between Hon Hai (30 percent) and Pegatron Corp (和碩, 70 percent), Yang said.

Among stocks in the Apple supply chain, he recommended Pegatron, smartphone camera lens supplier Largan Precision Co (大立光) and AAC Technologies Holdings Inc (瑞聲), a Hong Kong-listed acoustic components maker.

This year, iPhone shipments are expected to rise by an annual 10 percent, moderate growth compared with 46 percent last year, a report by NPD DisplaySearch said.

In contrast, shipments of low-end and mid-range smartphones are forecast to climb by an annual 37 percent this year to 958 million units, it added.

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