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September 20, 2017

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Target price for iPhone contractor raised to US$340

TAIPEI, Taiwan -- Analysts raised their target price from US$330 to US$340 on shares of iPhone casing supplier Catcher Technology (可成) in a research report on Monday.

Stock performance of the firm, which currently manufactures the aluminum body of Apple's iPhones, had been hit by news reports suggesting the American tech giant was planning a major design overhaul for the iPhone 8 in 2017 and that the casing would be made entirely out of glass.

The latest analysts' report noted that glass casings still require durable metal frames to support the handset, reflecting confidence in improved prospects for the company. The report expects the average selling price (ASP) to remain at similar levels next year, while forecasting the firm's revenue to increase at a 22-percent compound annual growth rate (CAGR) between 2016 and 2018.

Previous reports predicted the company's ASP would drop 20 percent due to uncertainty about the new glass-based redesign.

The 3.5-inch iPhone 4, which also had a glass body, contained a stainless-steel frame in the middle — its ASP is around US$30. The ASP increased after Apple introduced a series of metal-based products, and while the casing of the new model will be made out of glass, analysts estimate its ASP to be at least US$30, as iPhone costs have been rising around 15-percent with every upgrade.

Analysts expect the manufacturing costs for the iPhone 8 to increase overall as well, thus raising the target price to US$340.

Apple's 10th Anniversary Phone

The iPhone 8 would be Apple's 10-year anniversary phone and has been rumored to sport an OLED display, a multi-sensor camera and a display-embedded fingerprint sensor.

The Nikkei Asian Review reported in May that Catcher Chairman Allen Horng (洪水樹) said Apple will have only one device with glass casing next year.

In addition to the 10-nanometer A11 processor, the iPhone 8 may also be equipped with wireless charging capability and biometric features like the iris scanner.

The rumor is based on a research note from Ming-Chi Kuo, a KGI Securities analyst, cited by MacRumors. Kuo hinted that if Apple were to choose wireless charging, the chargers would be supplied only by Pegatron. He said wireless charging is expected to become common across Apple devices in 2018.

Since every Apple handset since the iPhone 5 in 2012 has been launched in September — with the exception of the iPhone SE — market watchers said the phone is likely set to launch in early September 2017, going on sale in mid-September.

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