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TheStreet Open House

Apple Places Huge Order For Next Generation Of iPhone: Report

Stocks in this article: AAPLQCOM

NEW YORK (TheStreet) -- Apple (AAPL) has reportedly ordered the manufacture of somewhere between 70 and 80 million larger iPhones in advance of the expected launch later this year.

According to The Wall Street Journal, Apple has asked for production of two new iPhone 6 models - one with a 4.7-inch  and the other with a 5.5-inch touchscreen - to begin next month. Apple's iPhone 5s and 5c devices have 4-inch screens and must do battle with popular large-screen smartphones made by Samsung, HTC, LG, Xiaomi and other Google (GOOG) Android-based smartphones.

Apple shares were gaining 0.23% to $94.16 in late morning trading in New York.

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Last year, Apple reportedly ordered between 50 and 60 million of the then new iPhone 5s and 5c's in advance of the Sept. 20th introduction. Almost immediately, customers faced big shortages and huge delays due to the overwhelming demand. Aiming not to have the same problem this year, Apple is reportedly asking its suppliers to ramp up huge numbers of finished handsets in advance of the upcoming, but unannounced launch date.

The next iPhones are rumored to be a complete redesign, with the models featuring rounded edges, larger sized screens made from Apple's sapphire glass technology, an improved camera, the ability to communicate with Apple's much rumored smartwatch and will include the already announced iOS 8 operating system.

Ivan Feinseth of Tigress Financial Partners believes the new iPhone 6 devices will have more memory as well as larger screens to better compete with Samsung's big Galaxy and Galaxy Note smartphones. The "current iPhones are too small for most people" who would prefer larger screens to browse through photos and watch videos," Feinseth said via phone. He rates Apple a "strong buy."

Apple faces increased competition from other companies already making and successfully selling millions of large screen smartphones. Also this fall, Samsung is expected to announce its new Galaxy Note 5 phablet - possibly with a jumbo, somewhat flexible screen. HTC is working on variants of its well received One smartphone and LG is releasing its new flagship G3 model this week.

Raymond James analyst Tavis McCourt said the high-end of the current smartphone market is currently ruled by an Apple-Samsung duopoly and that will not change much with the release of new phones. In a phone interview, McCourt said the new iPhone models could grab some sales away from the other high-end manufacturers but should have only "a modest impact" on Samsung. McCourt added that the same is true in China where Apple has been successfully selling its high-end handsets while other local brands such as Xiaomi, Lenovo, Huawei and Oppo are moving many less expensive models.

This morning, China's up-and-coming Xiaomi announced its loaded "Mi 4" an Android phone with top-of-the-line specifications (Qualcomm (QCOM) Snapdragon 801 processor, 3 GB RAM, 13 MP camera) and a metal, iPhone-like frame that will sell for $320 (16 GB) to $420 (64 GB) without a contract. Xiaomi announced it has sold more than 21 million phones in the first half of this year. The company also announced a $13 wireless fitness band, today, designed to work with its new phone.

Today's reported comes on the day that Apple will announce its quarterly earning after the closing bell. Analysts surveyed by Thomson Reuters expect the company to announce earnings per share of $1.23 cents a share on $37.99 billion in revenue. Analysts will be especially interested to see how many iPhones Apple sold in the third quarter. That number is expected to fall in the 35-36 million unit range.

-- Written by Gary Krakow in New York.

To submit a news tip, send an email to tips@thestreet.com.

Gary Krakow is TheStreet's Senior Technology Correspondent.

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