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Self-proclaimed “Apple (NASDAQ:AAPL) fanboy” Walter Piecyk, the BTIG Research analyst who turned into a Wall Street heretic earlier this year when he made contrarian bullish predictions about the company, is now trying to calm investors’ newly developed fears.
Apple shares have been in a slump lately, dropping into official bear zone this week over worries about production issues, the iPad’s dropping market share, and the exit of two top executives. However, Piecyk wrote in a research note to clients that supply issues of the iPhone 5 appeared solved. “[P]roduct supply no longer appears like it will be an issue this quarter and there should be some carryover demand from a supply-constrained iPhone 5 launch in September,” the analyst wrote, according to Barron’s. “We believe that supply demand might soon be in balance, if it is not there already.”
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While Apple’s online store still shows shipping predictions of three to four weeks, waiting time for the iPhone 5 has declined to about 1 week for most North American carriers, including AT&T (NYSE:T), Verizon (NYSE:VZ), and Sprint (NYSE:S).
“Apple did not respond to our question on why they are quoting 3-4 week ship times for the iPhone 5 on their site while wireless operators are showing 1-2 weeks or less,” the analyst wrote. “We perhaps wrongly assume that Apple would prefer to have sales through their own distribution channels in order to capture any other online purchases that are made [...] Long store lines and long ship times generate excitement in the press around new product launches [...] In addition, the ability to purchase an iPhone 5 or iPad mini the night before on the web site for a next day pick up in the store has been a new and popular strategy.”
Piecyk added that the company should “have no problem hitting our estimate of 47.5 million iPhone 5s” this quarter. However, sales are projected to fall to 42.5 million in the March quarter. “There was some investor hope that supply constraints in the December quarter would spill over into the March quarter but that seems like a stretch when a customer can have an iPhone delivered in a week or reserve it overnight for in-store pick-up,” Piecyk wrote.
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