Wake Me Up When September Ends: How A Later Than Expected iPhone 5 Helps Your Portfolio

A report out of AllThingsD this morning notes that the next version of Apple's AAPL iPhone, the iPhone 5 could be delayed until October, despite vacations from Apple and AT&T T employees being told not to go on vacation in September. An anonymous source told AllThingsD, “I don't know why AT&T's calling for all hands on deck those weeks, but it's not for an iPhone launch.” According to the source, the next version of the iPhone will come in October, one month later than many on Wall Street are expecting. If true, the later than expected launch of the iPhone could hurt suppliers quarters, and make customers who are waiting for the phone already more eager than they already are. According to a report out of AppleInsider, 74% of Verizon VS customers are waiting for the next version of the iPhone. Analyst Gene Munster wrote in a note, "This pent up demand for the next iPhone at Verizon may drive numbers higher than the 3.8 (million) units we are modeling Apple to sell through Verizon in the Sept. quarter. "And our overall iPhone unit estimate of 22.0m in the Sept. quarter may prove to be conservative." Munster went on to say, "Of those surveyed, 29% already have iPhones and 64% expect their next phone to be an iPhone, 17% have an Android device and 17% also indicated their next phone to be an Android." While many thought that AT&T and Apple were blocking out vacations in September were a precursor to the launch of the iPhone 5, if this source is correct, it would be an alteration to what we have seen in the past. For previous launches, Apple and AT&T employees had to be around when a new iPhone was launched. Perhaps we will see an announcement of the new iPhone in September, but an actual launch of the phone in October. If this were to happen, it could affect some quarters of Apple suppliers, such as ARM Holdings ARMH, OmniVision Technologies, Inc. OVTI, Cirrus Logic, Inc. CRUS, and Qualcomm QCOM, all which generate a significant portions of their revenues from the iPhone. Even if Apple were to delay the launch of the phone for one month, it would not materially impact Apple's quarter, and could even prove to help Apple's brand cache even more, as customers continue their eager ways. Taking a look at Apple, despite its high share price, shares are cheap on nearly ever valuation metric you can think of. The company trades at less than 13 times forward earnings, and is growing revenues 30+% year-over-year. The Green Day song "Wake Me Up When September Ends" seems applicable here, especially if the rumors are true. ACTION ITEMS:

Bullish:
Traders who believe that the iPhone 5 will launch on time might want to consider the following trades:

• Take advantage of any dips in the supplier names that you see.

• Traders may also take advantage of any dip in Apple, as one month will not affect the earnings report for Apple that much, as Apple does not follow the calendar for its quarters.

Bearish:
Traders who believe that the iPhone 5 will launch in October may consider alternate positions:

• Most of Apple's suppliers DO run on calendar quarters, and could see some short term blips in the revenues for the July-September quarter, especially if analysts have baked in numbers from Apple for the current quarter.

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