Another ugly day for Apple. The stock is down 3.4%, which is worse than the broader market, which is off ~1%.
What’s causing the pain? Investors are suddenly worried about iPhone sales. Qualcomm said it was going to have trouble making chips that Apple would need for the next iPhone. Thus, everyone is worried one of Apple’s key products won’t arrive at the expected time.
Piper analyst Gene Munster has a note on the matter. He’s not too worried:
- QCOM will likely support an Apple iPhone launch in October. Based on our checks, we believe the design win momentum of QCOM’s 28nm products has been exceptionally strong and a 28nm LTE baseband is likely designed into the next iPhone. QCOM’s supply issue likely pushes the launch of the iPhone to October. Based on the increased capital spending this year from TSMC and QCOM’s efforts over the last quarter to port its 28nm designs to UMC and probably Global Foundries, we think QCOM will have the capacity to support a Q4 LTE iPhone 5 launch. Moreover, the slow wireless infrastructure spending in 1H:12 is also likely a result of the lack of availability of a low power 28nm LTE baseband modem.
- Launch Timing Irrelevant As Long As iPhone 5 Upgrade Is Compelling. We believe that regardless of what happens with the March quarter regarding the iPhone, the most important point is iPhone 5 is coming as a compelling update and the Street’s 8% y/y unit growth estimate for the December-12 quarter is likely too low. While our model currently assumes iPhone 5 in August, it is more likely the phone launches in October given Qualcomm commentary around 28nm chip supply. We believe Apple will include LTE in the iPhone 5 as an important feature in the product update.
Photo: Google Finance
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