What Apple’s iPhone orders mean for Hon Hai
Wu notes that iPhone channel inventories rose 3.3 million to 14.3 million units and that iPhone 5S orders are on back-log. He said this appears to confirm the adjustments they made to expected iPhone 5C shipments earlier. He believes iPhone 5S orders are continuing to rise, and this is good for Hon Hai Precision Industry Co., Ltd OTCMKTS:HNHPF (2317) because the company has the greatest exposure to the iPhone 5S.
Apple Inc. (AAPL) will launch the iPad Air this week, and Thompson notes that this is also a good thing for Hon Hai because it should help boost the supplier's sequential sales growth and operating margin during the December quarter. He reports that since the iPad Mini with Retina display isn't launching until late November, Pegatron Corporation (4938) OTCMKTS:PGTRF faces a headwind for operating leverage during the December quarter
Apple estimates raised
The U.S. team increased their fiscal 2014 estimated iPhone units 2% to 159.3 million while lowering their estimated iPad units 12% to 70.98 million. They increased their full-size iPad estimates 36% while lowering their iPad Mini estimates 38%.
In all, Apple Inc. (AAPL) is now expected to ship 157 million iPhones in all of calendar year 2013 and 160 million iPhones in all of calendar year 2014. Credit Suisse analysts believe the company will keep losing market share to Android, however, because it continues to ignore the mid-tier smartphone segment. They suggest iPhone share will fall to 16.1% in the 2013 calendar year and 13.1% in the 2014 calendar year. That's compared to 18.1% in the 2012 calendar year.