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Thread: Predictions Point Towards Apple Absorbing Quality Control Costs for iPhone 5

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  1. #1
    MMi Staff Writer Akshay Masand's Avatar
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    Default Predictions Point Towards Apple Absorbing Quality Control Costs for iPhone 5


    A few days ahead of Apple’s quarterly earnings report, analyst Shaw Wu of Sterne Agee says he expects “vintage conservative” guidance from Apple ahead of a big holiday quarter. The reasoning behind this expectation is the fact that Wu believes Apple will partially absorb quality control costs associated with the iPhone 5.

    Wu believes that Apple’s near-term gross margins will be between 40.5% and 41.5%, numbers that are lower than Wall Street consensus which is currently between 42% and 43%. The prediction also comes less than a week after an unnamed official with Foxconn said the new iPhone 5 is the most difficult device the company has ever assembled. The complexity behind the design of the iPhone 5 has apparently resulted in low yields, which has led to constrained supplies in the market.

    Apple’s margins will continue to be pushed lower by the anticipated launch of a smaller 7.85-inch iPad mini. Wu expects Apple will end up selling its iPad mini at lower margins than the full-size iPad, at least initially, giving the company the opportunity to achieve a lower price point and take on competitors such as the Amazon Kindle Fire HD and the Google Nexus 7.

    As far as the September quarter, Wu believes Apple sold between 25 million and 26 million iPhones, which is again slightly lower than the Wall Street consensus of 27 million. He predicts that the iPad sales will be around 16.5 million, below the consensus of 17 million to 18 million. According to him, the Mac will see about 4.8 million units sold which is actually on par with the Wall Street consensus of 4.7 million to 4.8 million. We’ll find out soon enough once Apple’s earnings report is released on Thursday.

    Source: AppleInsider

    Twitter: @AkshayMasand

  2. #2
    iPhoneaholic aidanharris's Avatar
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    No offence to the writer but in English what does all this mean :P

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    Green Apple Own3d's Avatar
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    Quote Originally Posted by aidanharris View Post
    No offence to the writer but in English what does all this mean :P
    No offense to you, but... Offense*

  4. #4
    Green Apple Evaded's Avatar
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    Quote Originally Posted by Own3d View Post
    No offense to you, but... Offense*
    +1

  5. #5
    iPhoneaholic aidanharris's Avatar
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    Quote Originally Posted by Own3d View Post
    No offense to you, but... Offense*
    I'm from the UK and speak British English (as apposed to American English) so nope offence is correct...

    Quote Originally Posted by Evaded View Post
    +1
    -1

  6. #6
    iPhone? More like MyPhone VerizonIphone4_help's Avatar
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    it means that apple won't have as big a "miss" (they still beat their own projections) when compared to what everyone thinks they'll do in terms of sales and profits. That's if these numbers are correct (won't know till apple releases them).

    This directly affects stock prices. Not a mod topic, but certainly an apple one. I'm already waiting with my stock in hand if i wasn't on vacation i would have sold at 700+ but oh well it'll keep going up imo if you give it more time (though i think the 1k mark is still quite a ways out, at least 6 months).

  7. #7
    iPhoneaholic aidanharris's Avatar
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    Quote Originally Posted by VerizonIphone4_help View Post
    it means that apple won't have as big a "miss" (they still beat their own projections) when compared to what everyone thinks they'll do in terms of sales and profits. That's if these numbers are correct (won't know till apple releases them).

    This directly affects stock prices. Not a mod topic, but certainly an apple one. I'm already waiting with my stock in hand if i wasn't on vacation i would have sold at 700+ but oh well it'll keep going up imo if you give it more time (though i think the 1k mark is still quite a ways out, at least 6 months).
    Thank you. Makes perfect sense when you put it that way

  8. #8
    What's Jailbreak?
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    Quote Originally Posted by aidanharris View Post
    I'm from the UK and speak British English (as apposed to American English) so nope offence is correct...



    -1

    +1 For british english speakers, the way the language should be spelt
    Independent App Store Developer

  9. #9
    iPhone? More like MyPhone Alluziion's Avatar
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    Quote Originally Posted by aidanharris View Post
    I'm from the UK and speak British English (as apposed to American English) so nope offence is correct...
    I'm from the UK too... Americans and their "American"
    Whenever I see posts like that it reminds me of this person...

    I went to England and they spoke American??? Why is this? - Yahoo! UK & Ireland Answers

    Anyway, the business lingo basically means that Apple is not likely to reach it's predicted targets because of problems with the iPhone 5 and its supply chain. Increased costs caused by quality control and less sales caused by supply constraints suggest that their profits won't be as high as previously predicted.

    However, the sales may move into the next quarter and therefore it may increase the forecast for then (3 months time).

    And as VerizonIphone4_help pointed out, most stock trading is performed upon speculation and the rest upon solid figures so this may become further trouble for Apple and their share/stock value. Remember, most big PLCs (Public Limited Companies) care more about their shareholders than their customers.

    You may already know some of this but just thought that I'd actually contribute rather than trying to teach you American like some users here >_>

    Quote Originally Posted by Evaded View Post
    +1
    -2

  10. #10
    iPhone? More like MyPhone
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    Quote Originally Posted by Wolf Gang Fresh View Post
    +1 For british english speakers, the way the language should be spelt
    I think the Americans rules the world so everything has to be the American way

  11. #11
    What's Jailbreak?
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    Quote Originally Posted by mytran80 View Post
    I think the Americans rules the world so everything has to be the American way
    -___-

  12. #12
    The Big D NewdestinyX's Avatar
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    Quote Originally Posted by Own3d View Post
    No offense to you, but... Offense*
    Obviously you weren't paying attention in Middle School English class where American students are taught that 'original' English (and current British English) spells many '-se' words with '-ce' (e.g. offence, defence, etc..).. It's a big world now, dude. Wise up.
    Here to help if I can. If I can't I know someone who can!

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