Barclays cuts new iPhone shipment estimates on slow production

Taipei, Sept. 2 (CNA) British banking group Barclays Plc has lowered its shipment forecasts for Apple Inc.'s next-generation iPhones by as much as 20 percent because of slower initial production and a smaller screen than most Android phones. Total iPhone shipments -- including the iPhone 5S and 5C -- are now estimated at 28 million to 30 million units in the third quarter of this year, down from Barclays' earlier projection of 35 million to 37 million units. However, the iPhone shipments will likely bounce back to between 54 million and 56 million units in the fourth quarter as the year-end holiday shopping season approaches, the bank said in a note to clients dated Aug. 30. "We estimate that the initial product ramp might be slower than expected. The iPhone 5S yield rate might be an issue," Kirk Yang, a Hong Kong-based analyst at Barclays, wrote in the note. "In addition, some telecom operators might be hesitating to over-order both 5S/5C models on account of its 4-inch screen size, which is smaller than today's mainstream 4.5-5 inches that the market demands," Yang said. Barclays said Apple is likely to hold its next press event Sept. 10 in San Francisco to launch two new models of the iPhone. The high-end iPhone 5S should be available with a new fingerprint function, a faster processor and dual LED flashlight at the back of the phone, but its screen size should remain at 4 inches, the same as the current iPhone 5, the bank said. A lower-priced model, the iPhone 5C, is basically a similar phone to the iPhone 5 with a plastic casing, which is forecast to be sold at US$350-US$400 without contracts, according to Barclays. From an assembly perspective, Yang said, the iPhone 5S will be assembled by Taiwan's Hon Hai Precision Industry Co., while orders for the iPhone 5C will be split between Hon Hai (30 percent) and Pegatron Corp. (70 percent). Among stocks in the Apple supply chain, he recommended Taiwanese assembler Pegatron, Taiwan-based smartphone camera lens supplier Largan Precision Co., and AAC Technologies Holdings Inc., a Hong Kong-listed acoustic component maker. The iPhone shipments in 2013 are expected to rise by an annual 10 percent, representing moderate growth compared with 46 percent in 2012, according to a report by market information advisory firm NPD DisplaySearch. The slowing growth of iPhone shipments signals saturation of the high-end smartphone market in the U.S. and Europe, the report said. In contrast, shipments of low-end and mid-range smartphones will climb by an annual 37 percent this year to 958 million units, accounting for more than 50 percent of total smartphone shipments worldwide, the report said. (By Jeffrey Wu)