Apple Price Target Cut to $630 at Sterne Agee

On Friday morning, Sterne Agee cut Apple price target from $ 715 to $ 630. This modification appeared after shares of AAPL have fallen nearly 40 percent from their 52-week high.

Regarding this action, analyst Shaw Wu stated that there have been evidence regarding a build plan reduction for iPhone, probably as a result of an inventory drawdown plan reduction ahead of refreshes in the second half of 2013.  Although Sterne Agee reduced the iPhone forecast, iPads and Macs remained intact.

In addition to this statement, Shaw Wu also asserted that there exists proof in regards to a build activity for what seems to be the iPhone 5S, as well as an additional low-cost iPhone, created from a composite material case.

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In relation to this concept of a composite case, the KGI Securities analyst Ming-Chi Kuo anticipates that super thin plastic casing combined with glass fiber will be stronger than the usual plastic cellphone casings. Additionally, Kuo also predicts that these casings will be coming in a range of four to six colors, having a thickness of 0.4 to 0.6mm, below a more typical 0.7 to 1mm. As to the display, Ming-Chi Kuo expects Apple will stick with a 4-inch display for the low-cost phone, although, according to the rumors, they plan to move to 4.5 inches.

 

Apple Supply Chain May Not Be Accurate

Regarding Wu’s expectations, it is known that they were based on Apple Supply Chain, a strategy that Tim Cook, the Apple Chief Executive advised against earlier this year, when he affirmed that such reports are not reliable. Cook held a speech emphasizing the complexity of the supply chain and the existence of multiple sources for things. He accepted the fact that certain information might be precise, but even in that case, deciding what the data signifies for Apple business is beyond the bounds of possibility.

As expected, although Cook’s affirmation made sense, it cannot stop the analysts from attempting to elucidate everything they are capable of from Apple Far East supply chain. There are reports that have prompted a number of analysts to reduce their price targets for the company; therefore, the analyst Shaw Wu is not the only one who is informed about the rumors of order cuts made by the Apple Company.

Although Apple is likely to hit the end of its guidance for the current quarter, this result seems better than some market watchers who anticipate Apple to entirely miss its own guidance.

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