Depressed sales and a delayed launch are already priced into Apple’s stock, says analyst Daniel Ives.
From a note to clients that landed on my desktop Wednesday evening:
With iPhone 12 and the highly anticipated 5G models on the horizon slated for a September launch, instead Cupertino finds itself staring at a major quagmire whether to launch the phones this Fall. As we have discussed often with investors over the last week we believe the chances for a launch in the September/October timeframe is “extremely unlikely” and would assign a 10%-15% probability it happens given the lingering supply chain issues that remain across Asia (Malaysia suppliers just halted production due to COVID-19) coupled by a global pandemic that has consumers worried about their health, groceries, jobs, and hand sanitizer over buying a new iPhone.
Taking a step back, having one of its most important iPhone launches in its history into a consumer environment still recovering from the impact of this unprecedented COVID-19 dark storm would be a risky decision that likely gets shelved until holiday season in our opinion. Apple has one shot at its first 5G launch and tepid success out of the gates due to a lukewarm consumer appetite would be a disaster scenario that further plays into the mindset of Cook & Co. as they ponder the potential timing of this flagship product rollout…
In a nutshell, Apple’s stock now is pricing in depressed iPhone units, a 5G launch getting delayed, and supply chain not normalizing till the May/June timeframe. We believe iPhone 12 now likely launches around the holiday timeframe in a more normalized consumer environment with “springboard-like demand” momentum heading into FY21.
Maintains Outperform rating and $335 price target.
My take: Considering the enthusiasm with which Ives has has been singing the 5G super cycle song, you’d think any delay would be a big deal for him.
See the Apple 3.0 Daniel Ives archives