On Wednesday, Reuters reported that Qualcomm was having trouble meeting demand for some of its advance cellphone chips for the rest of the year due to manufacturing constraints and that would lead to higher operating costs faster than earlier expectations.
At this stage we cannot secure enough supply to meet the increasing demand we are experiencing, Qualcomm Chief Executive Paul Jacobs told analysts on a conference call.
It's widely believed that the next iPhone iteration will sport Qualcomm's MDM9615 LTE chipset, which allows for both voice and data connections over faster Long Term Evolution (LTE) networks. In addition, the chip is also smaller and more power-efficient, said iDownloadBlog.
Given that the chips facing supply shortage are used for the latest high-speed smartphones based on LTE technology, Bernstein's Rasgon told Reuters that it could lead to a slowdown in the roll out of the LTE smartphones. He didn't comment on Apple in particular but said the supply shortage could upset LTE progress in general.
Munster also suggested the same. He wrote in a note to investors on Thursday that even if Apple had indeed wanted to release the next iPhone, presumably called the iPhone 5, before October of this year, supply constraints with Qualcomm LTE chips would still cause a delayed launch of the device. According to him, October would probably bring the highly anticipated smartphone - a full year launch after the iPhone 4S.
Munster, however, believes that based on increased capital spending this year from Taiwan Semiconductor Manufacturing Company, Qualcomm will be able to support a fourth-quarter launch of a new iPhone with LTE 4G connectivity, Apple Insider reported.
It is more likely the phone launches in October given Qualcomm commentary around 28nm chip supply, he said. We believe Apple will include LTE in the iPhone 5 as an important feature in the product update.
The analyst said that the release of the next-gen iPhone should lead investors to raise their projections for financial results in the quarter ending December 2012. He also wrote that he had previously expected an August release for the new Apple device.
iPhone 5 - A Compelling Upgrade
In an earlier note, Munster wrote that the release timeframe for the next-gen iPhone is of little concern, since the demand is captive. In the latest note also he remained firm to his previous analysis. He said that the new iPhone model would be a compelling upgrade, would feature a new body design and work with faster wireless networks.
When it comes to the existing iPhone 4S, people didn't experience anything new from the device's look as it was pretty much identical to its predecessor, the iPhone 4. And that has probably paved the way for growing rumors that Apple will bring some change to the form factor of its next-gen iPhone.
Obviously, with the help of Siri, the holidays and other factors, the device still sold in record numbers. But if you think that Apple will be able to pull that off again - release another iPhone 4-like handset with a minor spec bump - you're high, said an iDownloadBlog report.
As Brian White of Topeka Capital Markets said, the next-gen iPhone could sport a 4-inch display, contrary to earlier reports of a large 4.6-inch and 3.5-inch screen. Some other sources also said that the device would sport Quantum Dot LED curved glass edge-to-edge display with 1280 x 720 resolutions (367ppi).
Some reports also said that Apple had internally seeded a prototype next-generation iPhone, packing a variation of the A5X's S5L8945X architecture and 1GB of RAM. The variant in question is rumored to be an entirely new processor dedicated to the device's smaller form factor and less visually intensive needs.
As far as the other likely features are concerned, the upcoming iPhone model includes an 8 megapixel (or even higher) camera with the ability to take pictures in the panorama mode, a 2 megapixel front-facing camera for video chatting, iOS 6, 4G LTE technology, Near Field Communication (NFC) technology, improved Siri and a much-improved battery life.
Strong Demand Predicted For iPhone 5
Analyst Mike Walkley of Canaccord Genuity said that iPhone sales will continue to decline until the next-generation model launches later this year. Walkley also raised his price target on shares of Apple stock to $740, reiterating a Buy rating. Though he believes that the iPhone-maker will post strong results for the fiscal quarter ended in March, he lowered his EPS estimates for fiscal 2012 to $43.13 from $44.58, BGR reported.
We have lowered near-term iPhone unit estimates, but we have increased our F2013 iPhone estimates as we anticipate very strong demand for an LTE iPhone 5 ramping during the December quarter, Walkley wrote in a note. We maintain our belief Apple is well positioned for strong sales and earnings growth driven by new product introductions across its portfolio.
The upcoming launch of Apple's sixth generation iPhone would be bigger than its predecessor, says Goldman Sachs analyst Bill Shope. He said that it's likely to be one of the most important smartphone product cycles till date and raised his Apple stock price target from $700 to $750.