Apple more likely to launch 5-inch 'Maxi': CLSA
January 16, 2013, 12:01 pm TWN
TAIPEI -- American electronics giant Apple Inc., which is currently testing new iPhone prototypes, is more likely to launch a larger version of the iPhone than a cheaper model because of its brand image, CLSA Asia-Pacific Markets said in a research note Monday.
The Hong Kong-based brokerage believed that Apple is currently sampling four new iPhone models — a refreshed version of the iPhone 5 called "iPhone 5S," an "iPhone Maxi" sized between 4.8 and 5 inches, and one or two "iPhone Mini" lower-end models.
Just because Apple is working on these prototypes, however, does not mean that they will become commercial, CLSA noted.
Although Wall Street is focusing on the possibility of an iPhone Mini, CLSA predicted that the cheaper model was unlikely to hit the market in view of Apple's pricing strategy and brand image.
"(In contrast), giving consumers choices of a regular iPhone and of an iPhone Maxi sized about 5 inches appears simpler and shouldn't lead to significantly lower margins," Nicolas Baratte, head of technology research at CLSA, wrote in the note.
CLSA has lowered its forecast for Apple iPhone shipments in the current quarter from 42 million units to 39 million units, given that solid demand in the United States and China has been offset by weaker trends in some developed Asian markets and Europe.
If Apple includes both a low-end iPhone Mini and a larger iPhone Maxi in its smartphone line, the company would ship 286 million iPhones in 2014, compared with an estimate of 202 million units based on shipping only regular iPhones, Baratte said.
On the supply side, an enlarged Apple product portfolio could benefit three Taiwanese suppliers — handset camera lens supplier Largan Precision Co., touch panel supplier TPK Holding Co. and printed circuit board maker Zhen Ding Technology Holding, according to CLSA.
The brokerage also maintained its "underperform" rating on flexible printed circuits maker Career Technology Co., contract electronics maker Hon Hai Precision Industry Co. and contract laptop maker Pegatron Corp.
Deutsche Securities Asia forecast earlier this month in a report that Apple might launch lower-end smartphones this year, considering that 80 percent of the worldwide smartphone growth is projected to come from emerging markets in 2013 and 2014.
The forecast echoed other recent media reports indicating that the next wave of growth in the smartphone business will come from developing markets, where the iPhone is too expensive for most consumers.