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Late Summer Apple (AAPL) iPhone 6 Likely, Jefferies Says

March 5, 2014 7:24 AM EST
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Price: $138.20 -3%

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    46 Buy, 17 Hold, 5 Sell

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Those expecting an early iPhone 6 launch may be out of luck. Jefferies' Apple (NASDAQ: AAPL) analyst Peter Misek said based on his checks a late summer iPhone 6 is now likely. He said, "We had believed Apple would try to pull forward the launch; however, display yields will likely prevent an early launch." The analyst also noted Apple's CarPlay is just the beginning of Apple's involvement in the Internet of Things and they expect an "iWatch" later this year. The analyst reiterated a Buy rating and $625 price target.

"Our checks indicate Apple is trying to improve yields and cost down the On-Cell screens for the iPhone 6," Misek said. "Additionally, we believe Apple is working on significant modifications to the camera module processor and potentially a new co-processor alongside the M7 for biometrics and sensors related to health. We believe these modifications require more time and as a result a late summer launch is now more likely."

Misek continues to believe the iPhone 6 will be a significant product cycle as it will fill Apple's "~5-inch" product gap. "Our checks also indicate that initial Samsung GS5 monthly builds will be below initial GS4 builds, but the overall unit target for GS5's lifetime is the same as the GS4. We believe the combination of pent-up demand for a larger iPhone and possibly less intense competition from Samsung bodes well for the iPhone 6 launch."

The analyst said an integrated modem/WLAN likely not until iPhone 6s.

On the iWatch, Misek said: "We believe iWatch production yields remain extremely challenged based on our supply chain work, but continue to see iWatch as a 2014 event, especially in light of the wearables focus at MWC 2014. While we continue to see the smartwatch addressable market as limited, we were unimpressed with competitor products at MWC and believe Apple can quickly gain share. We believe CarPlay, iWatch, and other wearables/IoT opportunities can strengthen Apple's ecosystem and create a halo effect for iPhone/iPad/Mac sales."

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $531.24 yesterday.


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