Apple Inc. Seen to Have Strong Q3; iPhone 6, iWatch Launch Part of Company's 'Year of Innovation'

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A woman looks at the screen of her mobile phone in front of an Apple logo outside its store in downtown Shanghai September 10, 2013.
A woman looks at the screen of her mobile phone in front of an Apple logo outside its store in downtown Shanghai September 10, 2013. REUTERS

Suppliers of Apple Inc. had a strong June quarter which analysts believe is a positive sign for the company too. According to reports, analysts continue to look ahead for Apple's expected product releases in the fall.

Cantor Fitzgerald analyst Brian White said in his Apple Barometer report that suppliers' sales in early June show better "historical seasonality." White said 97 per cent of sales of Apple from the companies in his barometer have made it. Top suppliers from Taiwan that generated the bulk of their sales from Apple were included in the barometer. As a result, Apple's Taiwanese suppliers enjoyed higher stock gains.

White continued to describe 2014 as the "Year of Innovation" for Apple. He highlighted the importance of the company's future product launch and referred to it as Apple's "Fab Fall." The analyst noted that criticism has been directed at Apple in the last 18 months as rival smartphone makers have released smartphones with larger displays. Apple has yet to release an iPhone with a screen size beyond 4 inches.

White said Apple investors were becoming concerned about the company's lack of innovation. According to the analyst, the perceived lack of innovation and Apple's failure to release a bigger iPhone display has affected the company's valuation.

White has noted in his report that his visits to China has highlighted Apple's slowing momentum. He has observed the rise of "mega-sized smartphones" and blames the trend for Apple's slowdown. However, he believes Apple's iPhone 6 will have a larger display than its predecessors and predicts a successful launch. He discovered that smartphone consumers have a "mega-sized appetite" for the iPhone 6. In addition to the iPhone 6, White said the iWatch will also boost Apple's growth throughout the year.

Apple Inc is widely expected to release a wearable device as the industry is projected to grow with the entry of Google's Android Wear. The iWatch is said to focus on health and fitness applications. According to analyst reports, health applications are still considered as significant selling points for the iWatch, but analysts predict a voice messaging app could make Apple's wearable device the next big thing in the market.

White rated Apple stock as a "Buy" with a price target of $111.

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