Two Possible Apple, Inc. Product Delays -- Worth Fretting Over?

A couple of new reports suggest two of Apple's (NASDAQ: AAPL  ) major upcoming products may be getting delayed. Is this a problem investors should be worried about? Probably not. And judging from Apple's stock that opened in the green this morning, the market seems to agree.

iWatch and Phablet iPhone 6 dealys
KGI Securites analyst Ming-Chi Kuo (via AppleInsider) says that the larger version of the upcoming iPhone 6 may have been delayed to as late as 2015. Further, he thinks the iWatch may not enter mass production until November. Although reports have varied, the general consensus in the Apple rumor mill before this report was that the two products could be launched sometime around this fall.

iPhone 6 concept. Design by Tomas Moyano and Nicolas Aichino.

The potential production delay for the 5.5-inch iPhone 6, Kuo says, stems from bottlenecks for in-cell touch panel production and "unevenness on the redesigned 'iPhone 6' metal casing." The earliest Kuo says investors could expect the phablet-sized iPhone 6 at this point is around mid-November, though it would be in limited quantities.

Notably, however, Kuo says the 4.7-inch iPhone 6, combined with the iPhone 5s and 5c models with their usual annual price cuts, should help drive sales during the holiday quarter, helping Apple still manage to put up big numbers for its bottom line.

As far as Apple's so-called iWatch, Kuo says that the delay relates to a combination of complex hardware and software issues. 

iWatch concept design by SET Solution. Image used with permission. Watch a video of this concept here.

Should investors care?
There are three reasons that investors should care very little (if at all) about reports like these.

  1. Though Ming-Chi Kuo has been surprisingly accurate regarding Apple's future product specifications, he's been less accurate on product timing. 
  2. Apple CEO Tim Cook has explicitly advised against reading into production yield speculation, emphasizing the complexity of the company's sprawling supply chain. 
  3. As Kuo noted, a delay in the larger iPhone shouldn't have a meaningful negative impact on Apple's EPS growth for its first fiscal quarter. And the iWatch is likely to be wholly accretive to earnings, so it just delays the positive impact on Apple's business by a few months.

In short, we can't know for sure if these rumors on product timing are even true. And, even if they were, it would have little outlook on Apple's business over the long haul.

If Apple stock was trading at an aggressive P/E multiple that had huge growth expectations priced into the stock, I could see news like this possibly resulting in slightly less confidence in near-term business upside. But Apple's measly price-to-earnings ratio of just 16 means that there is already conservatism regarding Apple's future products baked in to the valuation.

This small company may win big on Apple's next big product launch
Apple's so-called iWatch will almost undoubtedly shake up an entire industry. But one small company may benefit from the likely enormous adoption of these smart wearable devices more than Apple. Even better, its small stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, just click here!


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  • Report this Comment On July 15, 2014, at 1:48 AM, Trololololo wrote:

    Daniel, I think your commentary is on the mark. In advance of past product launches by Apple, we've seen a torrent of such speculative reporting by Chinese and Taiwanese rumor sites and tech trade media. Often, one report contradicts another, and in general, as you correctly noted, rumors about yields, timing and often, features turn out to be highly inaccurate speculation.

    That you chose not to feed into the hysteria is very responsible. Rather than speculate, it's best to be patient, and let the facts bear out the truth. Especially when it's about a company like Apple.

    Kudos for keeping a cool head (unlike so many in the mainstream tech and financial media) about this. I'm content to wait for the facts, not wild guesses and rumors.

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