Tue, Jul 22, 2014, 5:31 AM EDT - U.S. Markets open in 3 hrs 59 mins

Recent

% | $
Click the to save as a favorite.

Apple Inc. Message Board

  • germantrader71 germantrader71 Mar 18, 2011 6:45 AM Flag

    RBS: Apple to lower iPad targets

    Information Technology
    Apple to reduce iPad target?
    Our supply checks suggest that Apple might reduce its 2011 iPad forecast to
    suppliers to c.35m units from 40m-45m units. Although a cut in Apple's forecast
    would be negative for sentiment toward the supply chain, we do not see a
    material impact on earnings.
    Developments: Supply chain checks suggest that Apple will lower iPad outlook
    ! Our channel checks suggest that Apple (AAPL US, NR) may reduce the indication it gives to
    suppliers for 2011 iPad shipments to c.35m units from 40-45m units. The new forecast may
    be given to key suppliers as early as next week.
    ! We have heard three possible explanations for the reduced guidance: 1) difficulties in the
    manufacturing process as thinner glass in the touch module is more easily cracked, 2)
    component shortages which may have been caused by the Japan earthquake; and 3) delay to
    the iPad 3 which is currently scheduled for launch in 4Q11. Apple’s website is showing that
    shipping time for all models is 4-5 weeks, which indicates that demand should not be the
    cause of the lower target.
    ! There was also a shortage of the iPad 1 soon after launch due to yield issues on both the
    company’s A4 processor and touch panel modules. These issues were solved within 3-4
    months.
    Sensitivities: Impact on supply chain earnings minimal
    ! We currently forecast Apple to ship 35m iPads in 2011. However, the company usually gives
    an optimistic forecast to its suppliers to ensure sufficient components. As a result, we see
    potential risks to our current forecasts.
    ! Hon Hai (2317 TT, Buy) is the sole OEM for the iPad. We estimate that a 5m unit reduction in
    iPad shipments would decrease our 2011F EPS by only 1%.
    ! Simplo (6121 TT, Buy) is the sole battery supplier for the iPad. We estimate that a 5m unit
    reduction in iPad shipments would cause our 2011F EPS to decline by 2.2%.
    ! TPK (3673 TT, Hold) is one of the two suppliers of the iPad’s touch module. We estimate that
    a 5m reduction in iPad shipments would decrease our 2011F EPS by 3%. For additional
    sensitivities, please refer to our 3 March 2011 report, "Touching down".
    ! LG Display (034220 KS, Buy) is the primary supplier of the iPad’s LCD panels. We estimate
    that the iPad accounts for only 3-4% of LGD’s revenues. Therefore, a 5m (14%) reduction in
    our iPad forecast would have no material impact on earnings. Secondary panel sources
    include Samsung (005930 KS, Buy) and Chimei-Innolux (3481 TT, Hold). The impact on
    these companies would be even smaller than LGD.
    Investment view: Negative sentiment could present buying opportunities
    ! Although a cut in Apple’s forecast would be negative for sentiment toward the supply chain,
    we do not see a material impact on earnings. Therefore, a negative reaction by the market
    could represent a buying opportunity.
    I

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Germantrader71 - I would much appreciate if you could supply the link.

      I am short calls going into today's expiration and I can't find the story anywhere else.

      Thanks in advance.

      Mark L.

      • 1 Reply to mmlevine
      • no link but here's full text again:




        Produced by: RBS Asia Limited Taipei Branch
        Equity | Asia
        Flashnote
        Information Technology
        Apple to reduce iPad target?
        Our supply checks suggest that Apple might reduce its 2011 iPad forecast to
        suppliers to c.35m units from 40m-45m units. Although a cut in Apple's forecast
        would be negative for sentiment toward the supply chain, we do not see a
        material impact on earnings.
        Developments: Supply chain checks suggest that Apple will lower iPad outlook
        ! Our channel checks suggest that Apple (AAPL US, NR) may reduce the indication it gives to
        suppliers for 2011 iPad shipments to c.35m units from 40-45m units. The new forecast may
        be given to key suppliers as early as next week.
        ! We have heard three possible explanations for the reduced guidance: 1) difficulties in the
        manufacturing process as thinner glass in the touch module is more easily cracked, 2)
        component shortages which may have been caused by the Japan earthquake; and 3) delay to
        the iPad 3 which is currently scheduled for launch in 4Q11. Apple’s website is showing that
        shipping time for all models is 4-5 weeks, which indicates that demand should not be the
        cause of the lower target.
        ! There was also a shortage of the iPad 1 soon after launch due to yield issues on both the
        company’s A4 processor and touch panel modules. These issues were solved within 3-4
        months.
        Sensitivities: Impact on supply chain earnings minimal
        ! We currently forecast Apple to ship 35m iPads in 2011. However, the company usually gives
        an optimistic forecast to its suppliers to ensure sufficient components. As a result, we see
        potential risks to our current forecasts.
        ! Hon Hai (2317 TT, Buy) is the sole OEM for the iPad. We estimate that a 5m unit reduction in
        iPad shipments would decrease our 2011F EPS by only 1%.
        ! Simplo (6121 TT, Buy) is the sole battery supplier for the iPad. We estimate that a 5m unit
        reduction in iPad shipments would cause our 2011F EPS to decline by 2.2%.
        ! TPK (3673 TT, Hold) is one of the two suppliers of the iPad’s touch module. We estimate that
        a 5m reduction in iPad shipments would decrease our 2011F EPS by 3%. For additional
        sensitivities, please refer to our 3 March 2011 report, "Touching down".
        ! LG Display (034220 KS, Buy) is the primary supplier of the iPad’s LCD panels. We estimate
        that the iPad accounts for only 3-4% of LGD’s revenues. Therefore, a 5m (14%) reduction in
        our iPad forecast would have no material impact on earnings. Secondary panel sources
        include Samsung (005930 KS, Buy) and Chimei-Innolux (3481 TT, Hold). The impact on
        these companies would be even smaller than LGD.
        Investment view: Negative sentiment could present buying opportunities
        ! Although a cut in Apple’s forecast would be negative for sentiment toward the supply chain,
        we do not see a material impact on earnings. Therefore, a negative reaction by the market
        could represent a buying opportunity.
        Important disclosures can be found in the Disclosures Appendix.
        18 March 2011
        Analysts
        Jeffrey Toder, CFA
        +886 2 8722 7099
        jeffrey.toder@rbs.com
        Rick Chen
        +886 2 8722 7008
        rick.chen@rbs.com
        76/F, 7 Xinyi Road, Sec. 5,
        Taipei, 110, Taiwan

        http://research.rbsm.com

    • YEE HA!

      viva EL XOOMO!

    • thanks

      ipad1.5 out for 5 days and target already lowered!

      good for MMI,LG and samsung!

      android to the moon!

    • People are saying Apple will have supply chain problems because of the Japan earthquake.... I don't think so. These reports are likely from Short seller slanted media.
      I would believe that Apple planned to produce 5-7 Million iPad 2s in the first 3 months considering that they are releasing it into 25 different countries by March 25th. This tells me that likely 2-3 million units have already built. Also that components for another 2-3 million units are already in China at Hon Hai factories. This should give the iPad 2 some breathing room for Japan to get up and running in coming weeks.
      As far as the factories in Japan that are unharmed and in operation producing Apple components: if logistics to ship to China are delayed Steve can send his Gulfstream to transport the iPad parts :-)
      Regarding reports that iPad2 is using Dragontrail glass from Japan?...... how do they know it is not GorillaGlass from Corning that was used for the Apple iPhones? Corning could probably fill the gap should there be a problem getting glass from Asahi Glass in Japan.
      Apple has no shortage of money. My experience is that money can make anything possible in a very short period of time. Don't worry about Apple getting the iPad 2 into the hands of millions of people in short order.

    • Why would apple reduce orders when demand is a blowout? SHYSTERISM at it's best.

    • last sentence says any weakness is a buying opp.

    • Let's hope Apple give a PR on how many Ipad 2 have been sold so far soon...

    • **Although a cut in Apple’s forecast would be negative for sentiment toward the supply chain,
      we do not see a material impact on earnings. Therefore, a negative reaction by the market
      could represent a buying opportunity.**

      TRANSLATION: We are crooks and we hope this hurts the stock price on options expiration because we don't want to lose our shares we sold calls against at 340. We are going to buy more if this well timed report brings the price of AAPL under 330 today.

      Can you believe they say to buy into a negative reaction THAT THEY CREATE?

      Wow they are admitting to creating a buying opportunity. AND THESE GUYS AREN'T BEING INVESTIGATED FOR MANIPULATION?

 
AAPL
93.939+0.791(+0.84%)Jul 21 4:00 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.