Telecom & Wireless

Analyst Tempers iPhone Growth Rates, Eyes China Deals (AAPL, CHL, SINA, BIDU, YOKU, TUDO)

Apple Inc. (NASDAQ: AAPL) is the most valuable company in the world and it is one of the most widely followed companies as well.  Investors and traders often hinge on every word from analysts as they try to figure out if they see Apple shares going to $700, $800, or even $1,000… Shaw Wu of Stern Agee has maintained his Buy rating and his $780 price target, but he is cautioning against looking for upside to iPhone sales in the next two quarters.

Wu said, “Recently, we have been asked by investors our take on the status of iPhone. From our supply chain work, we continue to believe iPhone upside is less likely in the June and September quarters due to reduced supplier build plans. Moreover, we continue to believe the upcoming 6th gen. iPhone will be a significant upgrade and will likely be a ‘true world phone’ meaning compatibility with China Mobile.”

Here is what Wu is looking for in the next upgrade cycle: “In terms of the 6th generation iPhone refresh, we continue to pick up from our supplier checks that it will likely be a significant upgrade with 3 key improvements: (1) a new form factor; (2) slightly larger screen; and (3) a 4G LTE wireless modem.”

On China Mobile Limited (NYSE: CHL) Wu noted, “iOS 6 refresh tailored for Greater China including the ability for Siri to understand and speak in Mandarin and Cantonese, easier Chinese character input, and integration with popular internet services including Baidu, Sina Weibo, Youku, and Tudou, make iPhone an even more attractive platform and bring it closer to a partnership with China Mobile.”

24/7 Wall St. would like to bring up one point here.  Better integration might sound good for the likes of Sina Corporation (NASDAQ: SINA), Baidu Inc. (NASDAQ: BIDU), Youku Inc. (NYSE: YOKU), and Tudou Holdings Limited (NASDAQ: TUDO). There is one small problem to consider here for these companies.  If American and Western companies are getting their advertising revenue cannibalized by mobile use, the same is likely for Chinese outfits which rely on sales of online advertising.


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