Morgan Stanley Analyst Predicts iPhone Delay


Apple’s release of its LCD iPhone model might be delayed until later on this year.

According to Barron’s, Morgan Stanley analyst Katy Huberty wrote to investors this week that Apple is having issues with “LED backlight leakage.” As a result, the company may be forced to release the smartphone in October instead of September.

The two other devices Apple is reportedly launching this year are still on track for a September release.

“We currently see no delay in the ramp of Apple’s upcoming flagship 5.8″ or 6.5″ OLED iPhones,” Huberty wrote. “However, suspected issues with LED backlight leakage have caused a 1 month delay in mass production of the 6.1″ LCD iPhone, although this is down from a 6-week delay baked into the original production forecast, according to suppliers.”

There have been recent rumors that Apple is working on three new iPhones for 2018, with the most affordable being an LCD-based iPhone that could come with a design similar to last year’s iPhone X. But unlike the others, it would feature an LCD screen that would be cheaper to produce.

A successor to the iPhone X, as well as an iPhone X Plus, are also reportedly be in the works. Those smartphones will have OLED screens, according to reports.

Hubert noted that she expects the delay to cause Apple to deliver a “slightly weaker-than-consensus September quarter.” Using data from a large number of Taiwanese Apple suppliers, Morgan Stanley discovered that “in the June quarter, these supply chain companies had a strong April and May, but a weaker June, especially a subset of 12 suppliers (a third of which are ODMs) that have been identified as having a higher correlation to Apple sales guidance and stock performance than others.”

“For this subset of companies, when Y/Y sales growth decelerates, Apple’s one quarter forward guidance typically comes in below consensus,” the report added. “This quarter, sales growth for these companies decelerated by 600bps vs. March quarter results, therefore we see modest downside risk to September guidance vs. consensus.”

However, Huberty, who has an Overweight rating on the stock, still raised her price target to $232 from $214 because peer stocks are getting more richly valued of late.