Rumors are rife that Apple Inc. (NASDAQ:AAPL) could release two larger iPhone 6 models in 2014, but an industry analyst said on Monday that only one of the two rumored larger iPhones could hit the market in the second half of this year.
UBS’s Steve Milunovich, who gave a 'Buy' rating on Apple shares with a $650 price target, wrote in a note to investors that the next-generation iPhone, dubbed the iPhone 6, is likely to be released in August or September, rather than in June, Barron’s reported.
Although two different iPhone 6 models have been predicted -- one with a 4.7-inch screen and another with a 5.5-inch screen -- only the smaller of the two “seems certain” this year while the larger model “may or may not launch at the same time and could be of the same resolution (lower pip), which would help app developers,” Milunovich said, citing his “checks” of the supply chain.
Milunovich also estimated that Apple would sell more units of the iPhone 6 in a year than the current iPhone 5s. Here is an excerpt from his note:
The stock may act better this summer in anticipation of new products... Our iPhone model is up just 10mn this year at 172mn vs 162mn last year... The second calendar half may surprise to the upside if either China Mobile or the iPhone 6 gain traction. Although the iPhone 6 could carry a lower margin since we would be surprised if it is priced at much of a premium, unit demand could be strong as surveys suggest Apple users want larger screen sizes.
Milunovich also said that the larger-screen iPhone 6 model could be priced higher than the current version of the flagship smartphone.
Andy Hargreaves of Pacific Crest agreed with Milunovich’s prediction of an iPhone 6 release this year, and said that the device is likely to be launched in the third quarter of 2014.
“We expect significant component orders to begin in July, which is consistent with public availability of the device in late September or October,” Hargreaves said. “However, it seems possible that Apple will continue to produce both the iPhone 4s and iPhone 5c. In this scenario, prices on the iPhone 4s and 5c would likely drop by less than the typical $100, which could generate incremental gross profit per unit compared to most expectations.”
China’s Commercial Times reported last week that Pegatron Corporation (TPE:4938), Apple’s equipment supplier, was expected to begin production of the iPhone 6 in the second quarter of this year at its new Kunshan plant, on the outskirts of Shanghai. The report also said that Pegatron would open up new factory space and was recruiting workers in China in an effort to meet orders to manufacture the iPhone 6.
The iPhone 6 is rumored to feature a larger, higher-resolution display, a thinner design, three new sensors, an improved 8-megapixel camera, sapphire cover glass and iOS 8 among many other new features and upgrades.