JP Morgan's Rod Hall On New Apple Digitimes Rumor: Take With 'Large Grain Of Salt'

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According to a new report by J.P.Morgan analyst Rod Hall, Apple Inc AAPL shareholders shouldn’t lose sleep over a recent story from Digitimes that Apple is considering abandoning its shift from G/G touch panels to In-Cell touch panels for future iPhone models. Hall believes that the rumors should be treated as such, but that the news of an Apple backtrack on touch panel technology would ultimately be immaterial for Apple.

Digitimes story
The Digitimes story, published on July 17, claims that Apple is considering a return to G/G touch panel technology after the company has experienced ongoing production issues with the new In-Cell technology being used in the next model iPhones, referred to as iPhone 6S models.

Although Apple is reportedly too far along in the production process to go back to G/G technology for 6S models, Digitimes reported that a move back to G/G for future iPhone models could simplify Apple’s production process by cutting down on overall production time. It would also alleviate bottleneck issues that make it difficult for vendors to increase resolution.

J.P.Morgan’s take
In his report, Hall writes that J.P.Morgan has also heard the rumors that Apple is experiencing In-Cell production difficulties. However, Hall believes that Apple shareholders have no cause for concern over Apple’s decision. “From an Apple financial point of view, we believe a switch back would be immaterial and possibly positive given what we believe continue to be poor yields for In-Cell,” he explains. He also adds that J.P.Morgan typically applies “a fairly large grain of salt” to Digitimes stories.

Outlook
Overall, J.P.Morgan remains bullish on Apple. The firm has an Overweight rating on Apple and a $145 price target on the stock.

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Posted In: Analyst ColorNewsRumorsAnalyst RatingsTech
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