“Shares of Apple were higher in late-morning trade on Friday as Drexel Hamilton said that the Cupertino, CA-based iPhone maker could benefit from battery problems in competitor Samsung’s Galaxy Note7,” Rachel Aldrich reports for TheStreet.
“The company has stopped sales of the Note7 and is issuing replacements for devices already sold,” Aldrich reports. “Drexel said that ‘the timing could not have been more propitious for Apple’ as the company prepares to launch the iPhone 7.”
Aldrich reports, “Drexel added that images of burning Galaxy Note7 devices in the media ‘will cause some damage’ to Samsung’s brand.”
“News reports yesterday cited a Samsung executive, claiming Samsung was preparing to issue a total recall of the phablet-sized phone, as my colleague Shuli Ren wrote overnight, the reason being a rash of defective batteries that have caused some Note 7s to burst into flames,” Tiernan Ray reports for Barron’s.
There has been no shortage of “gloom and doom” around Apple over the past several months, similar to the summer of 2013. However, we believe sentiment will begin to change with the launch of the iPhone 7 and into the iPhone 8 in 2017. After the massive upgrade cycle with the iPhone 6 that drove 37% iPhone unit growth in FY:15, the upgrade to the iPhone 6s was muted and we are projecting a 9% YoY decline in iPhone units in FY:16. We believe the iPhone unit cycle troughed in 2Q:FY16 and we expect iPhone unit growth to return in 2Q:FY17 and 5% growth for FY:17. — Drexel Hamilton analyst Brian White
