iPhone 5s

Samsung officially unveiled its flagship Galaxy S4 smartphone last night at a theatrical, Broadway-style presentation in New York, and analysts are quick to jump in today with opinions on what it means for Apple. AAPL is having a decent morning hitting a high of 442.50 and opinions from analysts seem to be split down the middle regarding whether the S4 has what it takes to cut into Apple’s market share.

Gene Munster of Piper Jaffray doesn’t seem too impressed with the S4 upgrade but noted Samsung’s new S Band is “a quick first pass for Samsung on wearable technology ahead of Apple’s watch. Munster added that he expects Apple to launch its smart watch product by 2014 (via Barron’s):

The Galaxy S4 appears to be largely an incremental update to the S3 including a slightly larger screen (4% larger on diagonal), better camera and processor, and updated software, but largely the same body style and casing. We believe some of the software features are unique, including the tilt to scroll, video pausing based on facial recognition, and hand gesture based interactions, but view these software improvements as minor compared with what Siri was to the iPhone 4S or even Google Now to Android.

Jefferies analyst Peter Misek thought the S4 will be “incrementally negative for Apple” but doesn’t view the S4 upgrade as “revolutionary” (via Zdnet):
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Update: While it’s hard to read too much into these reports, Foxconn told The Wall Street Journal the freeze on hiring is a result of “a high employee return rate following the Lunar New Year holiday.”

According to the report from Financial Times, Apple’s major assembly partner Foxconn has halted new hiring at its facilities due to a slow down in production for the iPhone 5:

The suspension in hiring by China’s largest private sector employer and the biggest assembler of Apple products, is the first such countrywide move since the 2009 downturn, prompted by the financial crisis. It underscores the weakening demand for some Apple products, which has put pressure on the US company’s battered share price.

Foxconn confirmed it is not currently hiring in its plants located in mainland China, and FT reported the company’s employees were informed that hiring would stop until at least the end of March “in response to reduced orders for the iPhone 5.” While the iPhone 5 doesn’t seem to be experiencing a slow down, according to the latest numbers from Strategy Analytics, the March time frame would line up nicely with rumors of iPhone 5S production beginning in March. Many analysts are calling for a June or July launch of the next-generation iPhone, and Apple could begin initial production as early as next month if true. The decreased production at Foxconn is likely thanks to the expected falloff in new sales in the months following the busy holiday season. Less likely is speculation that Apple could be switching manufacturers.

Recruiters in China told FT that Foxconn has stopped hiring specifically for the iPhone and iPad production lines in many of its factories:

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There have been many rumors this year about what upgrades Apple will include in its anticipated annual iPhone refresh. Most agree Apple will move to release two iPhones, but there is some debate about what those phones will be.

Rumor has it that Apple is working on a low-cost iPhone that will do away with the current iPhone design and instead use a new plastic case with a curved back similar to previous iPods. Despite being a less expensive device, that could make things even trickier for Apple to impress with an iPhone 5S upgrade that is largely expected to retain the “old” design of the currently shipping iPhone 5. The devices from competitors are making things even more difficult for Apple’s expected “S” upgrade. Rumors of a 4.8-inch iPhone prototype that recently surfaced don’t seem likely for the next iPhone, but that hasn’t stopped mainstream media and analysts from reporting that Apple is losing out on iPhone sales as consumers opt for larger screen devices. However, that might now be the case, at least not in the United States, with Strategy Analytics and NPD estimating Apple beat Samsung to become the No.1 phone vendor in Q4 2012. Will consumers want or expect a larger screen on the next iPhone, or will Apple’s usual minor refresh suffice?

What did past S upgrades have?
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A new report from Jeremy Horwitz of iLounge provided us with what he claimed is a few details on the upcoming fifth-generation iPad based on hands-on time with a “supposedly accurate” physical model. He also claimed to have details on upcoming iPhone releases.

Horwitz noted he has inspected what he believed are casings for the iPad 5, and he described a completely redesigned device with “virtually no left or right bezels, and only enough space above and below the screen to accommodate the mandatory camera and Home Button elements.” As previously rumored, Horwitz claimed the fifth-gen iPad as iPad mini-like in its physical design with similar “chamfered edges and curves” along with the slimmed down bezel.

He also speculated that Apple could go with an IGZO display to achieve what he said is a much thinner design compared to previous generations:

Beyond that, it’s noticeably thinner, as well, which is to say the the fifth-generation iPad will be smaller in every dimension than its predecessors. As it will have the same chamfered edges and curves, calling it a “stretched iPad mini” is very close to entirely accurate… The changes are so considerable that a new screen technology, such as IGZO, seems like a given. Going Retina for the third-generation iPad forced Apple to make that tablet a little thicker than the iPad 2, in part to seriously beef up the battery.

The report also said that Apple is now targeting an October release for the iPad 5, “give or take a couple of weeks,” after originally planning for a March launch.

Horwitz, who has been accurate with details of unreleased Apple products in the past, also claimed to have new details on the upcoming iPhone releases:

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Following reports from WSJ that Apple is cutting component orders for iPhone 5 due to “weaker-than-expected-demand,” Jeffries analyst Peter Misek is out today with a note to clients claiming initial production of the iPhone 5S will begin in March for a June/July launch (via StreetInsider):

 “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. Therefore we tweak down our CQ1 iPhone shipment estimate from 48M to 44M, which is still well above widespread fears of shipments in the mid-30Ms.”

Back in December Misek also claimed the 5S is coming in June and at the time said he expects Apple to ship the device with multiple colors, improved battery life, and possibly a 4.8″ Retina/IGZO display. However, in today’s note Misek said there has been no additional evidence for the 4.8″ prototype signaling the design could be for the iPhone 6.  Today he also added his thoughts on rumors of a low-cost iPhone, claiming Apple could release a low-cost device made of polycarbonate with no LTE and a 4″ non-retina display.

As for the rumors of less than expected iPhone 5 demand contributing to cuts on component orders, which is also impacting the company’s stock price this week, Misek provided his thoughts:
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