Thursday, July 18, 2013

Analyst: iPhone 5S production ramping up while mid-range iPhone manufacturing already underway

Writing a research note on Tuesday, Jefferies analyst Peter Misek said that his channel analysis suggests that Apple’s manufacturing partners (Foxconn, perhaps Pegatron) will begin producing the iPhone 5S later this month. However, his research note came at the same time that other supply chain sources said the iPhone 5S would be delayed until the end of the year.

Assuming Apple will release the iPhone 5S in the September / October timeframe that has been forecast for the iPhone 5S, Misek's prediction that iPhone 5S production will start later this month would be perfect.

In addition, Misek said, the ramp up of iPhone 5S production follows closely the start of production of the so-called
lower-cost iPhone. Not expected to be a low-cost device by any means, Misek feels the device will be priced in the mid-range, when unsubsidized, at somewhere between $300 and $400, and won't compete with truly low-end handsets that are popular in emerging markets.

Misek also feels that Apple will put production at around 25 million to 30 million units, between the two different products, and split just about evenly across the 5S and its still unnamed new lower-cost sibling. That could prove challenging to Apple's bottom line as the margin on the lower-cost device will definitely be less than on Apple's flagship.

To keep the price down down, Apple will cut costs by using a plastic casing and using less expensive components. It will, however, likely come in a variety of colors, a la the Nokia Lumia Windows Phone devices.

However, while Misek is pushing for production later this month, another report that was issued Tuesday said that iPhone 5S production will be pushed back until the end of the year. That report also cited sources in the supply chain, who said that Apple was delaying the 5S in order to change the screen size.

That report seems questionable for a number of reasons, though.

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