|Back to main|
Here's Why Apple Could Have 3 New iPhones This Year And Win in China
By: Chris Ciaccia
Much speculation has been made that Apple (AAPL) could unveil a larger smartphone, as it seeks to take on the likes of Samsung (SSNLF), Nokia (NOK) and others, who have larger devices. If Apple is really going to compete in China, it may have no choice but to do so.
Cantor Fitzgerald analyst Brian White, who rates Apple shares "buy" with a $777 price target, notes that his research points to the fact that Apple could release larger iPhones. "Our research checks yesterday suggest that Apple could unveil two larger iPhone screen sizes this year, a 4.7-inch and a 5.5-inch," White wrote in the note.
That's something Apple has been hesitant to do in the past, as Apple CEO Timothy D. Cook and former CEO, Steven P. Jobs, both believed the size of the iPhone was more than adequate for consumers needs for now.
However, Cook left open the possibility of a larger iPhone during Apple's fiscal second-quarter 2013 earnings call. Cook noted that Apple would not make a larger iPhone that has diminished quality. "Our competitors had made some significant trade-offs in many of these areas in order to ship a larger display, we would not ship a larger display iPhone while these trade-offs exist," Cook said during the earnings call.
White notes that given Apple's propensity to leave an existing iPhone in its product portfolio (in this case, the iPhone 5s and perhaps the iPhone 5c as well), Apple could have three iPhones for consumers to choose from in 2014, going into 2015.
Apple has historically launched its iPhones at one time, with 2013 being the first year the company has unveiled two phones. In recent years, the company has unveiled the phones in the Sept. and Oct. time frame.
However, White notes that if Apple does indeed launch two new, larger iPhones, it could announce them at different times. "Another incremental data point we uncovered yesterday was the notion that there would be a staggered launch of the two, larger-sized iPhones," White wrote in the note. "We felt this was an interesting insight because we believe there is urgency for Apple to unveil a larger sized iPhone (i.e., 4.7-inch) to catch up with the trend toward mega-sized smartphones in China and elsewhere in Asia, while a 5.5-inch iPhone could technically fall into the "phablet" category and be worthy of its own launch at a later date. With each incremental data point, we are trying to piece together this puzzle to better understand Apple's ability to better penetrate the 1.23 billion mobile subscribers in China."
Photo courtesy of Shutterstock.