Can Apple Inc. (AAPL) Afford to Wait On a Larger iPhone?

Page 1 of 2

There are two things that Apple Inc. (NASDAQ:AAPL) needs to do in order to satisfy investors craving continued iPhone growth: launch a mid-range iPhone as well as a larger iPhone. The company has waited much longer to expand the iPhone into a broader product family than it has with other devices like the iPod and iPad, and this expansion is now overdue.

Numerous reports have now speculated that while Apple Inc. (NASDAQ:AAPL) is indeed planning to launch a more affordable model this year, the larger one may not see the light of day until next year. Can Apple Inc. (NASDAQ:AAPL) afford to wait?

Apple Inc. (NASDAQ:AAPL)Wait for it
Yesterday, Japanese blog Macotakara reported that the mid-range iPhone made out of polycarbonate is still on track for a 2013 launch, and will retail for $330 — the same starting price point as the iPad Mini. The polycarbonate model will likely be thicker to increase durability and save costs.

Following that report, Chinese site EMSOne separately speculated that the more affordable iPhone would launch in August alongside the iPhone 5S that will feature incremental upgrades in line with the tick-tock strategy that Apple Inc.(NASDAQ:AAPL) repurposed from Intel Corporation (NASDAQ:INTC). Only the flagship iPhone 5S is said to include compatibility with China Mobile Ltd. (NYSE:CHL)‘s unique network and the mid-range model will not be supported on the largest wireless carrier in the world. There’s notably no mention of a larger iPhone.

These rumblings corroborate with the 2013 product roadmap that KGI Securities analyst Ming-Chi Kuo laid out in January. The analyst adds that the flagship should see the inclusion of a fingerprint sensor to increase security and leverage Apple Inc. (NASDAQ:AAPL)’s $356 million acquisition of AuthenTec last year. Kuo has a solid track record with accuracy, so his predictions carry more weight than others’.

It just so happens that Jefferies analyst Peter Misek also released a research note in February saying that Apple Inc.(NASDAQ:AAPL) has been running into manufacturing challenges in scaling up its display size from 4-inch to 4.8-inch. This is because Apple recently adopted the relatively new in-cell touch technology in its displays that integrates the touch sensors directly into the LCD panel in order to make the iPhone so thin.

Yields on the larger in-cell panels are proving to be low and Apple has extremely high quality standards. The difficulties are compounded since Apple also has very high volume requirements due to the popularity of its devices. An alternative would be to switch back to on-cell displays or other technologies with better yields. Either way, Misek similarly thinks the larger iPhone is being pushed out to 2014.

Long live the Phablet King
The phablet trend is getting stronger with no signs of abating, at least among OEMs. Not one to be shown up, Samsung’s latest attempt at overcompensation is the Galaxy Note 8.0 that features an 8-inch display.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!