Jefferies & Co.


'Jefferies & Co.' Articles

Apple Reportedly Negotiating with Carriers for $100 Price Increase on iPhone 6

Apple is negotiating with wireless carriers to raise the price of the iPhone 6 by $100, claims Jefferies analyst Peter Misek (Via StreetInsider). Carriers initially are refusing to negotiate on the iPhone's $199 base price, but they may not be able to resist as the iPhone 6 is shaping up to be 2014's blockbuster handset. "The possibility may at first seem far-fetched in light of investor concerns regarding possible carrier subsidy and handset price cuts due to smartphone saturation and lack of differentiation," Misek comments. "But we think this general lack of differentiation could be the reason why Apple may be able to get a price increase. Carriers realize that the iPhone 6 will likely be the only headline-worthy high-end phone launched this year and that they will lose subs if they do not offer it."Apple is expected to ship the iPhone 6 later this year, with rumors suggesting the phone will be available with a 4.7-inch touchscreen display at first. A larger 5.5-inch version may follow at the end of this year or early next year. Along with a larger display, the next-generation iPhone may include a thinner design, Apple's new A8 processor, a Touch ID fingerprint sensor, 1GB of RAM, and an improved camera with optical image stabilization. The iPhone 6 is expected to run iOS 8, which may feature a new Healthbook app, improved Maps and a possible Siri API.

Apple's 4.8-Inch iPhone 6 Reportedly Not Launching Until Mid-2014

Amid circulating rumors of a larger display for the iPhone, Jefferies analyst Peter Misek today reported that he does not see the device launching until mid-2014. Misek argues that problems with display yield and substantial other changes for the iPhone 6 will make a 2013 launch unlikely. Some rumors had suggested that Apple might be able to launch an iPhone 5S and a lower-cost iPhone in mid-2013 and follow with a larger iPhone as soon as late this year.We see three possible bottlenecks for the iPhone that could contribute to lower yields (and hence higher costs) and/or a delayed launch. - App processor production at 20nm. Apple’s current iPhone app processor is on 32nm. For the iPhone 6 we think Apple will likely skip over 28nm and go to 20nm to facilitate adding more cores (4 or even 8). While TSMC is targeting a 2014 ramp in its 20nm production we think that issues like double patterning could make it a more complicated transition than the 28nm ramp, which had its own substantial ramp and yield issues. - Display shifting from in-cell LCD to on-cell OLED or IGZO. We think in- cell is having difficulty ramping to 4.8”, which is making Apple look at switching to on-cell (a different integrated touchscreen technology) and OLED (despite Apple’s suppliers being well behind Samsung in their OLED capabilities) or IGZO. - Revamped OS. We think Apple plans to re-architect iOS to utilize more cores and better compete with Samsung. Also, we believe the way iOS interoperates with iCloud, gestures controls, and advertising will be substantially upgraded.Misek first noted

Apple Planning March Special Event to Introduce Developer Tools for TV?

Citing "channel checks", Jefferies analyst Peter Misek today reported in a research note that Apple appears to be preparing for a television-related product event next month. While Misek does not believe that Apple's rumored television set will be making an appearance at the event, he does suggest that Apple might begin setting the stage for the future product by launching developer tools that would presumably also allow the current Apple TV set-top box to gain third-party apps.Channel checks indicate Apple has a product event in March that is Apple-TV related (possibly an iTV SDK introduction). We think a Sep/Oct iTV launch is being targeted.Misek anticipates that Apple will launch its television set in the 42"-55" size range with prices starting around $1500. Rumors about Apple's television set plans have slowed down in recent months after a flurry of reports at the end of 2012, but just today fresh rumors of a potential Apple acquisition of German television maker Loewe have brought renewed focus. Apple has also gained regulatory approval for a tweaked Apple TV box, although the company claims that the update incorporates only minor internal changes and will be invisible to users. With the Apple TV software being based on iOS, Steve Jobs noted at the time of the launch of the revamped box in late 2010 that an App Store for Apple TV could launch when the time is right, indicating that the company has indeed been looking at opening up the platform to third-party developers. Update: The Loop's Jim Dalrymple has refuted Misek's claim of an event scheduled for

iPhone 5S Reportedly Slated for March Production with June/July Launch

Following up on his report from last month, Jefferies analyst Peter Misek has released a new research report indicating that Apple's iPhone 5S is still in line for a launch in June or July of this year, with production beginning to ramp up in March.Our checks indicate that preliminary builds for the iPhone 5S will start in March for a launch in June/July. As word of the earlier production schedule starts to spread, we believe we could see a slight slowing of demand CQ1 in anticipation of the new product launch and Apple will likely start curtailing channel inventory.Misek notes that he has been seeing signs of two iPhone 5S prototypes currently in testing, although one could be the cheaper iPhone that has been the subject of a number of rumors in recent weeks. On the topic of that cheaper iPhone, Misek says that the device "looks close to being greenlit or may already have been" and offers some "likely specs" in order to help bring Apple's costs down:Similar to the iPad mini, we expect a concentrated low-cost iPhone rather than a "cheap" one. Likely specs: polycarbonite case with 4" non-Retina display and no LTE. We believe a new low-cost iPhone would increase Apple's share, decrease [gross margins], but have little impact on [earnings per share].Misek also directly addresses the iPhone with a 4.8-inch display mentioned in his earlier report, now saying that he is seeing no further signs of the device. He suggests that the form factor is for the iPhone 6 further down the road, but we remain skeptical about the likelihood of Apple making yet another change to the iPhone's

Analyst Suggests iPhone 5S Could Launch in Mid-2013 with NFC, 128 GB Storage, 6-8 Colors

Jefferies analyst Peter Misek today released a new research report that is gaining attention for its claims regarding Apple's next generation of iOS devices. Based on supply chain checks, Misek believes that the iPhone 5S is likely to launch in June or July of next year, in line with several other reports citing a similar timeframe. Misek makes a number of interesting claims regarding features of the iPhone 5S, classifying them into "likely" and "possible" but offering little expanded commentary on any of them.Based on our checks, likely updates include a new super HD camera/screen, a better battery, and NFC. Possible updates include an IGZO screen for Retina+, 128GB storage, and coming in 6 to 8 colors.Going further, Misek discusses a number of different iPhone 6 prototypes he believes are currently circulating, referring to the device that would follow next year's iPhone 5S.Several iPhone 6 prototypes appear to be floating around. The model with a 4.8" screen is the most interesting. It has a Retina+ IGZO screen, a new A7 quad-core processor variant, and a new form factor with no home button. Full gesture control is also possibly included.Misek also revives talk of a low-cost iPhone at a $200-$250 price point on an unsubsidized basis, but claims that the project has not yet been given the go-ahead. A mid-2013 launch for the iPhone 5S would make for an accelerated update cycle on the iPhone, but as was seen with the iPad this year Apple may be working to speed up the intervals between product updates in order to enhance its competitiveness. Asymco's Horace Dediu

U.S. Cable Companies Reportedly Assessing Potential Infrastructure Impact of 'Imminent' Apple TV Product

Barron's reports on a new research note from Jefferies & Co. analyst James Kisner noting that he believes the launch of an unspecified Apple television product (presumably either a new set-top box or a connected television) is "imminent". Kisner's belief comes from information he has received indicating that at least one major U.S. cable company is assessing the potential impact on its network infrastructure from such a device.Our discussions with industry contacts suggest that at least one major N. American MSO is working to estimate how much additional capacity may be needed for a new Apple device on their broadband data network. We believe this potentially suggests an imminent launch of the Apple TV, a positive development for ARRIS, who is directly exposed to data traffic growth from incremental IP video streams on cable networksKisner's research note is actually addressing the impact on ARRIS, a major communications technology that handles much of the network infrastructure for U.S. cable companies, most notably Comcast. Kisner believes that a forthcoming Apple television product would bode well for ARRIS, as it would force cable companies to increase their network capacity to handle such demands as on-demand HD streams from users of the new Apple product. Rumors of an Apple television set peaked approximately a year ago with Steve Jobs having briefly addressed the topic for Walter Isaacson's authorized biography published shortly after Jobs' death. At the time, follow-up rumors suggested that the set could be announced in late 2012 ahead of an early 2013

Components for Apple Television Set Reportedly 'Starting to Move in Small Quantities'

Last month, Piper Jaffray analyst Gene Munster, who has long been a proponent of an Apple television set, reported that Apple was investigating components for just such a product, contacting suppliers to learn about the capabilities of their various offerings. As shared by Business Insider, a new report from Jefferies & Co. analyst Peter Misek claims that things have now moved a step further, with his recent visit to Asia yielding reports of "small quantities" of various components being shipped to Apple's television display panel partners. Misek expects that commercial production of an Apple television set will begin in May or June, with a launch coming sometime in the fourth quarter of this year.Evidence of commercial iTV production is starting: we believe specialty components have begun to ship to Apple's Asia panel suppliers with polarized films, filters, and IGZO components starting to move in small quantities. We expect commercial production in May/ June with 2M to 5M builds likely. We still expect a CQ4 launch.Despite resistance from content providers, Apple has also been rumored to be pressing ahead to develop a subscription TV service for launch by the end of the year, in line with predictions for the launch of the television set itself. In his report today, Misek has also raised his price target for Apple's stock from $599 to $699, boosting his iPhone sales prediction for the current quarter by over 5 million to 33.2 million

Thinner iPad 3 Coming with Low-Power Retina Display?

Rumors of a high-resolution 2048x1536 display for the iPad 3 have been circulating for some time now, but the new display's effect on the device's form factor is still up for some debate. A claim from earlier this month regarding Apple requiring two light bars in order to manage the much higher resolution of the iPad 3 was followed just last week with a report that the device will be 0.7 mm thicker than the iPad 2 in order to accommodate that dual light bar design. More claims of a 2048x1536 display for the iPad surfaced earlier this week, with that analyst's source indicating that Apple will continue to use in-plane switching (IPS) technology for the new display. But a new report from Jeffries analyst Peter Misek and shared by Forbes claims that Apple will not be using IPS on the iPad 3, and has in fact invested $500 million to $1 billion in new equipment to allow Sharp to produce the required displays using technology permitting a thinner and lower-power design.Also, we believe that Apple and Sharp together have a modified IGZO (indium, gallium, zinc) technology to achieve 330 dpi, which is sufficient for an HD display while not using IPS nor having to include dual-bar LED backlighting. In our view, this should lead to several design advantages, namely the device can be thinner, battery life should be longer, and the overall experience for users should be meaningfully improved.Misek noted in a separate report issued earlier today that Apple and Sharp are also working together on displays for an Apple television set, with a retooled Sharp manufacturing

Competitors Already 'Scrambling' to React to Apple's TV Plans

AllThingsD reports on a new research note from Jeffries analyst Peter Misek suggesting that manufacturers are already "scrambling" to react to claims that Apple is preparing to enter the television set market. And rather than innovating on their own, competitors are reportedly focused on trying to identify what Apple will do to revolutionize the industry.“Based on our discussions, interestingly other TV manufacturers have begun a scrambling search to identify what iTV will be and do,” says Misek. “They hope to avoid the fate of other industries and manufacturers who were caught flat footed by Apple.”Misek notes that Sharp appears to be retooling an LCD production line to suit Apple's needs, with mass production on the line reportedly targeted for February 2012. Such a development could put a product release sometime in the middle of the year. Previous rumors had claimed that Apple could announce its television set by late 2012 and launch the product by early 2013. Whatever Apple's plans are, Misek suggests that competitors will almost certainly be six to twelve months behind with their own offerings, giving Apple a significant advantage in the marketplace if it truly does offer a revolutionary new product. Sony has been the most visible company seeking to head off Apple's potential blockbuster entrance into the market, working to develop a "four screen" strategy across TVs, computers, tablets, and phones and investigating Web-based television services that would enable consumers to bypass traditional cable companies. Apple has dabbled in television with its

Apple to Begin Merging iOS and OS X With Quad-Core A6 Chip Next Year?

Jefferies analyst Peter Misek is gaining headlines today for a new report related by both International Business Times and Forbes, claiming that Apple is planning to harness the power of its forthcoming quad-core "A6" chip to begin merging iOS and OS X as soon as late next year. Misek claims that the merge will be completed by 2016 as 64-bit ARM processors become available to provide sufficient horsepower to run even professional-level OS X applications."We expect OS merger to start in 2012-13 and complete in 2016. Our preliminary view is that Apple can use a 32-bit ARM architecture to address the vast majority of the OS X ecosystem's needs in 2012-13 except for high-end professional devices. When 64-bit ARM is available in 2016, we believe Apple will have a single OS and hardware architecture," said Misek.Misek believes that the iOS-OS X merger is being driven by Apple's cloud ambitions, viewing a unified platform as key for seamless interaction with an online identity and associated content."Users want to be able to pick up any iPhone, iPad, or Mac (or turn on their iTV) and have content move seamlessly between them and be optimized for the user and the device currently being used," writes Misek. "We believe this will be difficult to implement if iOS and OS X are kept separate."According to the report, Apple is nearly ready to begin sampling the A6 system-on-a-chip, which is claimed to be making its way into iPad and iPhone models in 2012. Misek notes that a unified operating system and architecture for all of Apple's products will drive increased economies of scale

Deals Already in Place for Apple to Launch Netflix Competitor?

Building on his earlier claims that Apple is preparing a subscription video streaming service to take on Netflix, Jefferies analyst Peter Misek today issued a new report claiming that Apple already has deals in place with the major video studios and TV networks to support such a service.Apple might be ready to roll out its own video subscription service similar to Amazon and Netflix, Peter Misek at Jefferies reports in a note this morning. Specifically, he says, "As part of Apple's roll-out of cloud video services (and eventually an iTV), we believe Apple has unannounced deals with all/most of the studios/TV networks that are similar to the subscription streaming deal between Amazon and CBS."Apple earlier this week expanded its nascent iCloud service to include the re-downloading of purchased TV shows, including allowing Apple TV devices to stream the purchased content directly from the cloud. And with another claim today suggesting that Apple may finally be preparing to launch its "iTunes Replay" service that would fold the cloud-based TV show offerings in with a similar program for movies to support re-downloads and streaming, Apple appears to be making a significant push into bringing video to

'iPhone 4S' Coming in September With Sprint and T-Mobile Support?

Forbes reports on a new research note from Jeffries & Co. analyst Peter Misek claiming that Apple's next-generation iPhone will be a relatively minor revamp known as the "iPhone 4S" and will debut in September. Misek also claims that Apple will be expanding carrier availability in the U.S. to include Sprint and T-Mobile by the end of the year, with China Mobile also reportedly coming on board."According to our industry checks, the device should be called iPhone 4S and include minor cosmetic changes, better cameras, A5 dual-core processor, and HSPA+ support," he writes in a research note. But he also says that "industry checks indicate Apple will likely announce Sprint, T-Mobile, and China Mobile as new carriers."The "iPhone 4S" name first gained publicity last month in claims that Apple has been providing select high-level iOS developers with souped-up iPhone 4 devices, with the source citing an unofficial name of "iPhone 4S" for the device. Misek's report goes on to note that the next-generation iPhone is not likely to bring compatibility with faster LTE 4G networks rolling out in some markets, as the required chipsets from Qualcomm are not yet available in quantity to support the inclusion of the technology.As for LTE, he says the Qualcomm LTE chipset Apple would have used "is currently not achieving yields sufficient for inclusion in the iPhone 5." He says Apple had hoped to have the LTE chipsets ready, but was planning a version without LTE called iPhone 4S.The claim regarding a lack of LTE compatibility in the next-generation iPhone fits with earlier reports

Analyst Speculates Apple Prepping Video Subscription Service to Challenge Netflix

Speculation about Apple's plans for its massive new data center in North Carolina has been running rampant for quite some time, and we're always hesitant to place too much emphasis on claims of research analysts, but one report from Jefferies analyst Peter Misek is gaining some attention today for its claim that Apple may be preparing to take on Netflix in the streaming video subscription market. Apple is on the cusp of launching a "a new far reaching cloud-based service" focused on video, writes Jefferies analyst Peter Misek in a big report this morning. Misek says Apple will use its new massive data center in North Carolina to offer an advanced web-based video subscription product that rivals Netflix.Last week, a report surfaced claiming that Apple had locked in as much as 12 petabytes of storage purportedly set to support video download content. While Apple has been said to be preparing to roll out a cloud-based MobileMe revamp that would allow users to store video, music, and photos on Apple's servers, Misek argues that Apple will further use the capacity to launch a Netflix-like service that would serve to further drive sales of Apple hardware. Misek sees Apple's plans to potentially double the size of its new data center in the future as the first step towards a massive expansion of its server capacity that could see the company rolling out multiple such sites around the world in the years to come in order to support massive storage and streaming capabilities for such