Apple's stock takes hit as Wall Street anticipates Galaxy S4 launch
Apple's (NASDAQ: AAPL) stock took a dive during mid-morning trading on Friday as investors worried about the launch of Samsung's Galaxy S4 on March 14 in New York, according to Credit Suisse analyst Kulbinder Garcha.
Garcha cut his second quarter earnings estimates but maintained his "outperform" rating on Apple's stock because of an expected iPhone refresh in the second half of 2013, according to a report by The Street.
Garcha also noted that there appears to be a move by handset manufacturers toward larger screens. Close to two-thirds of the smartphones unveiled at this week's Mobile World Congress have bigger screens than that of the iPhone 5.
The Credit Suisse analysts predicted that Apple would only sell 30.6 million iPhones in the second quarter compared to 47.8 million in the last quarter, as consumers try out the Galaxy S4 or wait for the iPhone refresh.
While larger smartphones are on the rise, smaller tablets are growing in popularity, according to stats from NPD's DisplaySearch. The market research firm found that shipments of 9.7-inch tablets fell to 1.3 million in January from 7.4 million in December, while shipments of 7-inch and 7.9-inch tablets grew to 14 million in January compared to 12 million in December.
Apple's launch of the iPad Mini appears to be a timely decision. "The launch of the iPad mini in late 2012 has been seen as an acknowledgement by Apple that smaller size tablet PCs would become a larger part of the market than larger sizes. Key aspects are more attractive prices and the ability to hold the device in one hand rather than two," NPD analyst David Hsieh wrote in a blog.
Hsieh noted that Apple had planned to sell 40 million iPad Minis and 60 million iPads in 2013, but he expects the reverse, with Apple selling 55 million iPad Minis and 33 million iPads in 2013.
iPhone sales might not boost Apple's revenues in the second quarter, but iPad Mini sales might just save Apple's bacon.