At a time when the tech world is expecting Apple (NASDAQ:AAPL) to release the iPhone 5S sometime in the fall, an analyst finds clues for a September release of the new handset in the company’s fourth quarter earnings guidance.
During its quarterly earnings call on Tuesday, Apple expected its fourth quarter revenue to be in the range of $34 billion to $37 billion, and CEO Tim Cook said that the company is “working hard on some amazing new products that we will introduce in the fall and across 2014.”
Although that comment by itself is not enough to suggest any specific release date for the company’s upcoming products, Walter Piecyk, an analyst at BTIG, said that Apple’s latest earnings guidance for the fourth quarter would materialize only if the company releases new hardware in September.
“After delivering $35 billion in revenue in the June quarter, management guided to $34-$37 billion next quarter. Revenue would more typically drop multiple billions if the company had no new products planned," Piecyk said in a statement on BTIG's website.
Apple reported a gross margin of 36.9 percent for its fiscal 2013 third quarter ended June 29 and estimated gross margin between 36 percent and 37 percent for the fourth quarter. And, Piecyk believes that the unchanged gross margin guidance could be a strong indication that the new product launch for the September quarter will be that of a new iPhone, which pulls in higher margins than the iPad.
“The margin guidance also likely indicates that the new product launch this quarter will be an iPhone and not a lower margin iPad. While new iPhones are lower margin at launch, they are still higher margin than iPad’s,” Piecyk said.
Katy Huberty, an analyst at Morgan Stanley, also gave similar insights about Apple’s fourth quarter earnings, saying that there are many signs that suggest Apple may release new products in the September quarter.
Here are the key points that Huberty highlighted in a recent note to investors, obtained by AllThingsD:
1. Apple did not reveal much about gross-margin influencers for the fourth quarter earnings, which suggests that the company wants to avoid pre-announcing new products.
2. Apple’s wider-than-normal revenue guidance range of $3 billion indicates new products in the September quarter.
3. Apple’s suppliers are reportedly ramping up iPhone shipments in September and iPad shipments in October, which supports the company’s own comment of a “busy fall.”
Apple’s third-quarter earnings topped estimates, riding on the back of strong iPhone sales. The company sold 31.2 million iPhones, a record for the June quarter, compared to 26 million in the year-ago quarter. And yet again, the iPhone is expected to be a major contributor in achieving the company's earnings goals in the upcoming quarter, with a new low-cost iPhone, dubbed the “iPhone Lite,” assisting the flagship iPhone 5S.
However, if a report from Korea’s ETNews is to be believed, the existing iPhone 5 will not be a part of the Apple handset product line-up as the company might discontinue the device’s production in the fall, while focusing more on the iPhone 5S and the low-cost handset featuring a plastic shell.
The in-cell technology used on the iPhone 5’s touch-screen is "not suitable for low-volume production," which may lead to Apple abandoning the handset’s production and focus more on new models, according to the report.