Crothers quotes Yeung but doesn't give much context. Here's one Yeung quote from the CNET post: "Supply chain checks by Citi's Asia-Pac Technology Team suggest a mix shift surprisingly toward Apple's older iPhone4/4S. And with our expectation of a low-end iPhone slated for September launch, followed by a sub-$250 iPad Mini, we expect this trend to persist."
According to Crothers' interpretation of this rather Delphic pronouncement, Yeung is actually saying that Apple is shifting toward less-expensive products.
Yet Yeung's reference to the "older iPhone 4/4S" is confusing in Crothers' account. Crothers seems to think the two comments above add up to Apple designing and tooling up to deliver brand new, but cheaper, iPhone and iPad models. But perhaps Yeung means that more consumers in Asia-Pac are opting to buy the older, and lower-priced, iPhone models. Or that the supply chain companies are increasing their production of components for these older models due to surprisingly higher demand for these older phones. Or both. Or something else.
The iOSphere hates confusion as nature hates a vacuum. The indefatigable Kristin Dian Mariano summed up the Right Thinking Conclusion in the headline to her International Business Times post: "Forget iPad Mini 2 as Much Cheaper iPad Mini to be Released in the Holidays, Says Analyst."
In Crothers' CNET post, instead of citing comments or evidence actually drawn from the supply chain contacts, Yeung "mentions a comment by Apple Chief Operating Officer Peter Oppenheimer to back up the expected shift to cheaper devices," Crothers writes. Here is Oppenheimer's comment, made during the most recent earnings conference call in April: "We are managing the business for the long term and are willing to trade off short-term profits where we see long-term potential."
We're back in Delphic mystery since "long term" and "trade off short-term profits" doesn't immediately or obviously translate into "cheap iPad."
Then, confusing matters even more, Crothers concludes his post with two more quotes from Yeung's NTI: "September quarter...low-end iPhone (15 million units) & iPhone4/4S (10M) volume, will likely meet or exceed that of iPhone5S (10M) and iPhone5 (5M)." And "We detect [a]...pattern to lower-end mix that we view as part of a natural and inevitable trend for Apple and indeed the entire mobile device industry."
But how does higher demand for older, lower-priced iPhones (and, perhaps, also for older, lower-priced iPads?) show that Apple is "shifting" its product strategy to include new models designed for lower prices?
A more complete account of Yeung's NTI is by Tiernan Ray, writing Barrons Tech Trader Daily blog. In his post, Ray notes that Yeung repeated a Neutral rating for Apple's stock, "writing that margins may come under pressure this year as the company sees more sales of the lower-priced models of the iPhone, introduces a new, lower-cost model, and perhaps introduces a cheaper iPad, with assembly beginning in August for a September debut of the new products."
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