John Paczkowski

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Apple’s Guidance Implies New iPhone in September

iphonecheapios7_Martin_Hajek

Martin Hajek

Tim Cook said Apple has some great stuff coming “in the fall, and across all of 2014.” But when, exactly, can we expect it? The company’s latest earnings guidance may offer a clue.

For its fourth quarter, Apple said it expects revenue of $34 billion to $37 billion, with gross margins of 36 percent to 37 percent. And, according to BTIG analyst Walt Piecyk, those numbers are only possible if the company debuts some new hardware in September.

“We don’t think that Apple can hit its newly issued revenue guidance for the September quarter unless it launches new products,” Piecyk said in a note to clients. “After delivering $35 billion in revenue in the June quarter, management guided to $34-$37 billion next quarter. Revenue would more typically drop multiple billions if the company had no new products planned.”

Apple’s fourth quarter ends on Sept. 28, so if Piecyk’s theory is correct, we can expect to see some of that great stuff Cook has been touting earlier that month. The device most likely to debut? Given the margin forecast, a new iPhone.

Said Piecyk, “The margin guidance also likely indicates that the new product launch this quarter will be an iPhone and not a lower margin iPad. While new iPhones are lower margin at launch, they are still higher margin than iPads.”

Incidentally, Piecyk isn’t the only analyst with this view. Morgan Stanley’s Katy Huberty has a similar theory:

Several signs suggest that new products will ship in the September quarter.

  1. Apple provided less transparency into gross margin influences for the September quarter, seemingly to avoid pre-announcing new products.
  2. Apple provided a wider than normal revenue guidance range of $3B, noting many moving parts in the September quarter.
  3. Apple continues to talk about a “busy fall” which coincides with suppliers ramping iPhone shipments in September and iPad shipments in October.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik