Analyst: End the Apple Panic Already
By Aabha Rathee | More Articles - October 09, 2012
Apple ( NASDAQ:AAPL) investors are beginning to worry a little with the stock price dropping below $630,
but the company’s dedicated bullish analysts continue to insist that concerns are overblown. Sterne Agee’s
Shaw Wu, who has an $840 price target on Apple, calmed investor worries stemming from employee
disputes at Foxconn, iPhone 5 supply and demand questions, and recent product criticisms through
a note to investors on Tuesday.
“From our latest supply chain work, we have not picked up a drop-off in demand and production appears to
be improving with the bottleneck moving from components to the assembly of the iPhone 5 itself,” Wu wrote,
according to Fortune. “Our sources indicate that iPhone 5 is not easy to build with Apple’s very high
standards where it aims to produce each model to be an exact replica where variance is measured in
microns.”
Wu added that it was, in fact, overwhelming demand that was causing shipping lead times to remain at three
to four weeks and resulting in stocks at the retail level staying low. The analyst said he expected Apple to
report sales of 27 million iPhone units in the September-ending quarter and 46.5 million in the December
quarter.
Wu also expressed confidence that the rumored iPad Mini was on its way. “We are picking up much
increased component sourcing activity for what appears to be for a smaller form factor iPad,” Wu wrote. “We
continue to believe iPad Mini is the competition’s worst nightmare, but believe attractive price points will be
key.”
The analyst said that while, in his opinion, Apple did not need to price its new device as low as $199 to
match Google’s ( NASDAQ:GOOG) Nexus 7 or Amazon’s ( NASDAQ:AMZN) Kindle Fire HD, a price point
between $299 and $349 would be ideal.
“In sum, we believe concerns are overdone and this appears to be a typical consolidation after a
big run,” Wu concluded.
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