Apple Inc. (NASDAQ:AAPL) generates more buzz than any other tech company on the blogosphere, and sometimes, there are rumors that investors shouldn’t give a second glance. We’ve covered some of these questionable stories in the past, and they’ve included the media’s overreaction to a Black Friday study and multiple Apple iPhone rumors reported as fact. Heck, even last week, a bogus Facebook story briefly hurt FB shares, and we all remember the fake Google acquisition story in November.
As we’ve mentioned before, our point is this: many armchair analysts simple misread a story’s original source, and that’s how we find ourselves getting into this situation.
Today’s latest Apple Inc. (NASDAQ:AAPL) news is that the company is testing its next smartphone and operating system, according to TheNextWeb. In TNW’s original story, developers are speculating “that Apple has been testing hardware relating to a new ‘iPhone6,1′ identifier, powered by a device running iOS 7.” The story also mentions the following:
“From the developer logs that we have seen, the app requests originate from an IP address on Apple’s Cupertino campus, suggesting that members of Apple’s software development and app teams are compatibility testing some of the more popular or well-known applications already on the App Store. Although OS and device data can be faked, the unique IP footprint leading back to Apple’s Cupertino campus leads us to believe this is not one of those attempts.
Let us be clear by stating that there is nothing wrong with TNW’s report; the outlet does not make any mention of a specific iPhone model. That hasn’t stopped some media outlets from deeming the news as evidence that the phone in development must be Apple Inc. (NASDAQ:AAPL)’s iPhone 6. Frankly, this doesn’t make much sense.
Even more egregiously, this misinformation is branded as a “report,” despite the fact that TNW’s original story made no mentions of which iPhone model may be under testing.
So what should rational investors actually expect from Apple Inc. (NASDAQ:AAPL) in 2013?
In a research note from Topeka Capital Markets’ Brian White (via BGR), who currently holds a $1,111 price target on Apple Inc. (NASDAQ:AAPL) shares, it appears that the actual phone that TNW’s story may be speculating about is the iPhone 5S.
White says “the next iPhone (i.e., likely called the iPhone 5S) that we currently believe will be launched in May/June with certain supply production starting in March/April,” adding that “Our checks indicate that the next iPhone will have more choices for customers […] This entails an expansion in both the color patterns and screen sizes.”
While we’ve all been waiting for more color options on the iPhone for quite some time, his latter prediction of multiple screen sizes is intriguing. On the subject, he had this to say:
“Our checks are also indicating that the next iPhone will offer customers more choice in terms of screen size. […] Although Apple offers a 4-inch screen on the iPhone 5 and a 3.5-inch screen on the iPhone 4S and iPhone 4, the Company has never offered multiple screen sizes for a single model. We believe this is about to change with the next iPhone offering different screen sizes that we believe will allow Apple to better bifurcate the market and expand its reach.”
As BGR mentions, White also believes that “multiple screen sizes could allow Apple to better address emerging markets with a lower-cost iPhone.” As we’ve discussed before, emerging markets give Apple Inc. (NASDAQ:AAPL) its best “growth opportunity,” and a cheaper smartphone targeted at these areas is important for the company.
While predictions of a TV or a smart watch are obviously flashier, an iPhone 5S with greater variety may do the most for Apple’s bottom line. Typically, Apple’s iPhone generates close to two-thirds of its profits (see The Real Reason You Should Be Buying Apple).
Let us know your thoughts in the comments section below, and for more Apple Inc. (NASDAQ:AAPL) coverage, continue reading here, at Insider Monkey:
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