Barron's: AAPL: Production Cuts About Move to IGZO, Not Demand, Says Global Equities
Trip Chowdhry of Global Equities Research today writes that the worries about rumored supply-chain cuts in Apple‘s (AAPL) iPhone production are overdone because the cuts pertain to a change of technology, not a change in demand patterns, in his opinion.
Chowdry, reiterating an Overweight rating on Apple shares and a $650 price target, argues Apple has been shifting from using traditional displays to instead use the emerging semiconductor technology “IZGO,” a compound semiconductor process made up of indium, gallium, and zinc-oxide.
Sharp Electronics (6753JP), the pioneer in the technology, talked about it extensively last week at the Consumer Electronics Show in Las Vegas. At its booth at the convention center, the company showed off some first IGZO-based smartphones, which are selling solely in Japan at the moment. They did, indeed, have lovely displays, based on my casual examination of the phones. Sharp reps suggest such devices get days of standby despite greater brightness and resolution, thanks to lower battery use.
Chowdhry is convinced by what he saw at CES, and other trade-show events, that Apple is in fact moving to IGZO:
We attended various display conferences last year and the Consumer Electronics Show (CES) 2013 last week. Based on our discussions with technologists at these conferences, here is the converged view we got: Apple cut LCD orders by 40% to 80% not because the demand has declined by 40% to 80% but probably because Apple is shifting to IGZO (Indium Gallium Zinc Oxide) display techology; IGZO is ideal for large TV panels; IGZO is also ideal for flexible displays such as in the new iPhones, iPads and MacBooks; IGZO has 40 times faster response time than today’s LCD TVs.
The rumor was a lie and confirmed a lie by many - aapl is expected to report incredible sales for iphones and all products according to real analysts. Look at the facts aapl report stated more iphone 5s were sold that all other smartphones combined! One product!!!
If they were estimating 65Million for q2 they must have had at least that many from q1. If they sell 50M qi 40% being 4 and 4s that means 35M i5's are left over. Add to that 50% of 65M and thats all the inventory you need. Start building the 5S. Make sense now?