Analyst Cuts AAPL Over Delay of Rumored iPhone Launch

Analyst lowers AAPL expectations on missed launch of rumored iPhoneApple will likely miss the target launch window for the rumors low-cost iPhone, according to Jeffries analyst Peter Misek, so he's lowering his target price for the company's stock from US$500 down to $420. He also suggests that Apple is falling out of favor as a handset maker and is following in the path of BlackBerry.

Along with missing unannounced launch windows for the rumored lower cost iPhone, Mr. Misek is worried that the also unannounced iPhone 5S and iPhone 6 won't boost weak sales and lost sales to oversized smartphone/mini tablet devices.

"The phones could have fingerprint technology and we believe Apple is trying to move the iPhone 6 launch to CQ1 to stop the hemorrhaging to phablets, but historically when handset makers fall out of favor (e.g., the RAZR, BlackBerry, HTC) they fall faster/further than expected," he said.

He also cut his first quarter iPhone sales estimates based on what he sees as continued weakness through information from parts suppliers. Mr. Misek now expects Apple will bring in US$35 million instead of $37.5 million in iPhone sales for the first calendar quarter of the year based on the company selling about 25 million units.

Mr. Misek said full-size iPad sales are weak and that Apple will switch to an IGZO display to reduce weight and revive the product, according to StreetInsider. He added that a Retina Display iPad mini is likely coming in the smaller tablet's next update.

He thinks that Apple could miss his pessimistic guidance, too, thanks to sales lost to the brand new Samsung Galaxy S4. The rumored low cost iPhone could be a weak seller thanks to pricing between $350 and $450, which would help keep Apple's revenue from climbing thanks to weak sales.

Assuming Mr. Misek's predictions are right, Apple can expect plenty of disappointed investors and analysts. Considering his projections are based primarily on rumors and unconfirmed reports, it may be too early to start talking about death spirals.

Mr. Misik's $420 target price comes with a "Hold" rating. Apple is currently trading at $430.92, down 6.95 (1.59%).