Will iPhone 6 Enter Production in May? - Analyst Blog

Reportedly, the latest addition to Apple's AAPL iPhone product family, iPhone 6 will enter production from May, 2014 onwards.
    
Per reports, the new iPhone will be available in two different screen sizes, 4.7 inch and 5.5 inch, bigger than the 4-inch display of iPhone 5c and 5s. Apple has roped in companies including the likes of Japan Display Inc, Sharp Corp and South Korea's LG Display Co Ltd to make the screens.

The production of this new iPhone will begin at Japan Display's flagship plant at Mobaro. The other companies will follow suit from June onwards.

Both iPhone screens are expected to make good usage of in-cell touch panel technology which, in turn, would enable thinner construction compared to the standard touch panel films, which were introduced with iPhone 5. Reportedly, Apple, which has shunned mobile payments systems in its smartphones, will adopt near-field communication (NFC) technology in iPhone 6.

However, per reports, due to complexities with in-cell production technology for the larger 5.5-inch size, Apple will likely begin mass production with the 4.7-inch version. The reports also stated that the production of 5.5-inch screens is expected to start several months later, with the possibility of a shift to a film sensor instead of in-cell technology for that size.

Apple has been trying to reinvent its product strategy to counter tough competition in the smartphone market. The bigger size iPhones are expected to boost its competitive position against the likes of Samsung and HTC going forward. Most of the Google's GOOG Android-based smartphones from these manufacturers have screen size of 4.7 inch to 5.0 inch.

Apple is also looking to expand its footprint in the International territories, as growth slows in the matured domestic market. The partnership with China Mobile CHL is expected to boost Apple's market share in China going forward.

As Apple aims to become more global, the company is looking to make its offerings more racially diversified, as is the case with emoji's. Emoji's are ideograms or smileys, which Apple has decided to upgrade to different racial ethnicities from the current branches of Chinese, Indians and Russians.

We believe that Apple's loyal customer base, international expansion and a solid cash position will aid in achieving long-term growth. However, increasing competition from the likes of Samsung, Google and Microsoft MSFT in most of its major product segments, lack of innovative product, declining gross margins and increasing legal complexities are headwinds.

Currently, Apple has a Zacks Rank #3 (Hold).