Apple's (NASDAQ:AAPL) iPhone business is monstrous. At over half of Apple's revenue and an even larger portion of its operating profit, the device can make or break the entire company. This is why the iPhone 6 will be incredibly important to Apple's success. Fortunately, one strategic piece to the puzzle for Apple's next lineup of smartphones may have just been placed more favorably; the larger of the two devices could be launched earlier than expected.
Earlier launch, limited supply?
While the Apple rumor mill seems to mostly be in consensus that the tech giant is working on 4.7-inch and 5.5-inch versions of the iPhone 6, there is less certainty about when the larger of the two iPhones will actually hit the shelves.
Mostly, however, sources predict the 5.5-inch iPhone 6 is going to be delayed until a few months after the planned fall launch for the 4.7-inch version. The rumor mill has often cited supply constraints, particularly restrictions on the phone's new sapphire crystal display.
But Bloomberg is now reporting that Apple may launch the two phones simultaneously this fall:
Apple is ramping up on two bigger devices, said the people, who asked not to be identified because the plans are private. One model will have a 4.7-inch display, compared to the 4-inch screen of the current iPhone 5s, that may be available to ship to retailers around September, said two of the people. A 5.5-inch version is also being prepared for manufacturing and may be available at the same time, the people said.
MacRumors' Husain Sumra, however, warned that the 5.5-inch version of the iPhone 6 could be in short supply when it is released.
Stock of the 5.5-inch iPhone 6 is likely to be lower than the 4.7-inch model, mostly due to the more complex manufacturing of the phone and the need for an increase in production efficiency for the device before the manufacturing volume for it can be increased.
Will the launch date make a difference for Apple investors?
For shortsighted investors, maybe. Year-over-year iPhone sales may see a slight boost via limited availability of the larger iPhone 6 a few months earlier than planned. But with so many factors influencing short-term volatility in share prices, there's no telling what the stock will do by the time investors are aware of sales.
While rumors like these offer a helpful way for long-term investors to stay tuned to Apple's business, there's no reason for investors to get too caught up in launch date and supply chain rumors. But we can take solace in the fact that Apple obviously wants to do everything in its power to ramp up production to meet demand. Still, a limited supply for the first few quarters of iPhone availability isn't abnormal for the company.
The key item for investors to watch will be the overall success of this important new lineup of iPhones. Will the larger displays and new form-factors continue to compel an influx of upgrades and swarms of new Apple users across the world?
Last year, year-over-year iPhone sales growth in the company's fourth calendar quarter (the first full quarter of availability of its new iPhone lineup) lacked the blowout sales growth Apple investors are used to. iPhone unit sales for this important quarter only increased 6.7%. Can Apple renew double-digit year-over-year growth to the business with the iPhone 6?
The worst-case scenario for Apple investors is that they'll have wait until it reports the first calendar quarter results for iPhone sales -- if the larger version of the iPhone comes a quarter late -- to really gauge the health of Apple's most important business segment.
Meanwhile, however, we can at least rest easy in the fact that several studies and analyst predictions suggest Apple is in for substantial iPhone 6 demand.