Ticonderoga on Networking & IT Hardware: Highlights From Day 4 of Our China-Taiwan Tech Trip
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Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Ticonderoga on Networking & IT Hardware Industry: Highlights From Day 4 of Our China-Taiwan Tech Trip by Brian White
"The iPhone 5 Tug of War Carries Over Into China - Today we attended a China electronics trade show and the data points we uncovered support a continued tug of war surrounding Apple's (Nasdaq: AAPL)(Buy) iPhone 5 launch date. Certain data points at the show are pointing to a June launch, while others are leaning toward a September unveiling. For the China market, one of our contacts believes an October launch for iPhone 5 is in the cards, and this compares to a late September launch for the iPhone 4 in 2010. Additionally, we were told to expect the iPad 2 to launch in China during June, which would be much earlier than the late September 2010 launch for the iPad 1. There are also data points that are pointing to a potential autumn iPad 3 launch. Netting this all out, we don't believe investors should get hung up with concerns on the exact launch date of iPhone 5. If the iPhone 5 is released in September versus late June, Apple is likely to forgo 2 million to 3 million iPhone 5 unit sales in the June quarter, but these sales will likely occur in the September quarter. The iPhone 5 ramp outside of the U.S. could also occur at a faster pace, similar to what is occurring for iPad 2. We would also not lose sight of the fact that since Apple is ramping the iPad 2 at a much faster rate than the iPad 1 around the world, this should provide a more significant impact on the June quarter versus last year."
"Panel Makers Starting to Raise TV Prices on Japan Disruption - Our discussions with buyers of LCD TV panels at today's show highlight a push in recent days by the leading LCD panel makers to raise prices in light of the situation in Japan. During our conversations, we heard that panel makers raised prices on 42-inch LCD panels by 2% in recent days, and some are testing the waters on larger price hikes. Although the LCD panel makers may try to use the situation in Japan as an excuse to raise prices, the LCD TV vendors at the show continue to describe both the U.S. and Western Europe markets as weak. Without healthy end-market demand, we expect our LCD coverage universe of AU Optronics (NYSE: AUO)(Neutral), Corning (NYSE: GLW)(Sell) and LG Display (NYSE: LPL)(Sell) to continue to suffer."
"NTE Prepares for Tough Times with Japanese Customers. Our meeting with Nam Tai (NYSE: NTE)(Neutral) focused on the situation in Japan, which is expected to have a meaningful impact on the company as announced last week. Overall, we believe Nam Tai had expected growth this year at over 20%; however, the company's high concentration with Japanese OEMs and meaningful consumer electronics exposure has dampened this view. The small form factor LCD-related programs seem to be the most at risk."
"The iPhone 5 Tug of War Carries Over Into China - Today we attended a China electronics trade show and the data points we uncovered support a continued tug of war surrounding Apple's (Nasdaq: AAPL)(Buy) iPhone 5 launch date. Certain data points at the show are pointing to a June launch, while others are leaning toward a September unveiling. For the China market, one of our contacts believes an October launch for iPhone 5 is in the cards, and this compares to a late September launch for the iPhone 4 in 2010. Additionally, we were told to expect the iPad 2 to launch in China during June, which would be much earlier than the late September 2010 launch for the iPad 1. There are also data points that are pointing to a potential autumn iPad 3 launch. Netting this all out, we don't believe investors should get hung up with concerns on the exact launch date of iPhone 5. If the iPhone 5 is released in September versus late June, Apple is likely to forgo 2 million to 3 million iPhone 5 unit sales in the June quarter, but these sales will likely occur in the September quarter. The iPhone 5 ramp outside of the U.S. could also occur at a faster pace, similar to what is occurring for iPad 2. We would also not lose sight of the fact that since Apple is ramping the iPad 2 at a much faster rate than the iPad 1 around the world, this should provide a more significant impact on the June quarter versus last year."
"Panel Makers Starting to Raise TV Prices on Japan Disruption - Our discussions with buyers of LCD TV panels at today's show highlight a push in recent days by the leading LCD panel makers to raise prices in light of the situation in Japan. During our conversations, we heard that panel makers raised prices on 42-inch LCD panels by 2% in recent days, and some are testing the waters on larger price hikes. Although the LCD panel makers may try to use the situation in Japan as an excuse to raise prices, the LCD TV vendors at the show continue to describe both the U.S. and Western Europe markets as weak. Without healthy end-market demand, we expect our LCD coverage universe of AU Optronics (NYSE: AUO)(Neutral), Corning (NYSE: GLW)(Sell) and LG Display (NYSE: LPL)(Sell) to continue to suffer."
"NTE Prepares for Tough Times with Japanese Customers. Our meeting with Nam Tai (NYSE: NTE)(Neutral) focused on the situation in Japan, which is expected to have a meaningful impact on the company as announced last week. Overall, we believe Nam Tai had expected growth this year at over 20%; however, the company's high concentration with Japanese OEMs and meaningful consumer electronics exposure has dampened this view. The small form factor LCD-related programs seem to be the most at risk."
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