• Apple, expecting a rush on its $99 3G iPhones, underestimated demand for the $199 and $299 models. As a result, there were widespread shortages of nearly all 3GS iPhones through the first weeks of July.
• ”This is an interesting and arguably counter-economic trend,” he writes, one that should lead to much higher profitability — perhaps as high as 1,000 basis points.
• Apple has adjusted its production mix and supplies are improving. Wu is currently modeling 6.8 million iPhones for Q4 — nearly equal to Apple’s runaway fourth quarter last year (6.89 million iPhones) and up 31% from Q3 (5.21 million). It’s a forecast, he says, that could prove to be conservative.
MacDailyNews Note: Wu is discussing Apple’s fiscal 2009 fourth quarter which is the third calendar quarter, running roughly July-September.
• He is picking up signs that Apple’s suppliers could be gearing up to build 9 million to 10 million units.
Elmer-Dewitt reports, “Wu recently raised his [AAPL] price target to $184 a share.”
Full article here.
MacDailyNews Take: In tougher economic times, people look for quality, value, and durability. They tend to think more about their purchases — and the more people think, the better Apple’s products look. That’s why, even amidst the current macroeconomic conditions, Apple is selling record amounts of so-called “premium priced” products. People are thinking before buying and are therefore realizing that Apple’s products are the smart choice because they are actually less expensive since they just work, don’t require additional purchases to continue working, have much longer useful lives, have much higher resale value, and are free of the frustration tax found with cut-rate, low-margin, money- and time-wasting junk.
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