Apple’s supply chain is likely temporarily going to be affected by the Japan earthquake and tsunami, Piper Jaffray analyst Gene Munster writes today, but demand for Apple products is stronger than ever, he says, and that should ultimately drive shares higher.
Munster notes that Apple suppliers Mitsubishi Gas Chemical and Toshiba are both temporarily shut down to assess damage from the earthquake. “In both cases it is day to day as to when production will resume.”
As a result, Munster expects component delays for some Apple products, including the iPad 2 and iPhone 4, through the June quarter.
But, he argues, that investors have typically forgiven supply problems as long as demand isn’t affected.
“We believe the constraints caused by shuttering Japanese manufacturing facilities will cause a temporary supply disruption through the June quarter, but we also note that demand is stronger than ever, which should move shares higher.”
He also notes that Apple’s strategy of pre-buying and pre-paying for components may come to its advantage here.
As far as margins go, Munster says that the component issues probably won’t affect March or June quarter margins, but prices could increase in the second half of the year, potentially putting a pinch on margins or upside potential.
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