It appears Apple’s marquee products – the iPhone 5 and iPad mini – are just hitting their stride. After initial questions over suppliers and build quality prompted sputtering sales, demand for the two devices is expected to skyrocket over the next two quarters. After talking with Apple suppliers, Morgan Stanley analyst Katy Huberty told investors Thursday that she believes the Cupertino, California company will beat Wall Street expectations, fueled by lower-priced parts, the growth of China and the addition of upcoming Apple Stores in Brazil, a first for the country…
Based on the higher demand, Huberty forecasts Apple will sell more than 46 million iPhones and 23 million iPads in the current quarter with the consumer electronics giant selling more than 43 million iPhones and 19 million iPads in the following three-month timespan.
At the heart of her argument is the belief that the iPhone 5 will prompt upgrade holdouts to purchase the new handset while the iPad mini will expand Apple’s overall tablet sales. Supporting Huberty, other observers Wednesday dismissed the notion that the iPad mini would erode sales of the larger iPad.
For some time, China has been the wildcard when it comes to accelerating sales outside the United States.
The Morgan Stanley analyst expects the iPad mini will be welcomed by that nation’s consumers due to its lower price compared to the larger Apple tablet. At the same time, Apple may finally get China Mobile to ink a deal to sell its products.
An agreement with China’s largest carrier would be a nice holiday present for Apple CEO Tim Cook, who has travelled to the country to stress China Mobile’s significance. Sales of the iPhone 5 would also be boosted when the government there issues the final go-ahead to allow the LTE-based smartphone into the country.
Far from China, but a growing player in the Apple ecosystem, is Brazil. Word recently leaked that Apple plans to open an Apple Store in the South American nation.
An Apple Store is the company’s way of signaling a region’s importance. Brazil is already working with Apple’s supply partner Foxconn, which plans a factory there for the iPhone and iPad.
The analyst also had encouraging news for investors, concerned new technology used in the iPhone 5 and iPad mini might cut into Apple’s legendary profit margins.
According to Huberty, not only are suppliers receiving a higher number of orders from Apple, but the components the iPhone maker is seeking are arriving with a lower price tag.
All in all, today’s report is good news for everyone. Apple likely will sell more device in the coming months. Consumers probably will have an easier time finding devices on the shelves and suppliers are assured that the cash spigot from Cupertino is open wide.
The fourth quarter is not seen as the best-performing period of the year for nothing.
What do you think?
Has Apple finally turned the corner on its supply problems, as well as calmed worried investors?