Weak Apple (AAPL) iPhone 3G Adds at ChinaUnicom "Immaterial" - Analyst

Jefferies commented on Apple (NASDAQ: AAPL) after weaker than expected 3G subscriber additions at China Telco, which they believe have been weighing on the shares along with gross margin concerns.

"In our view, the slight perceived drag in China is immaterial to overall
iPhone numbers. Our checks and guidance from Catcher Technologies indicate
component orders beginning for the iPhone 4S," the firm noted.

Jefferies said the Catcher Technologies guidance supports iPhone 4S expectations. Catcher Technologies, the metalcasing manufacturer for Apple, raised both revenue and GM guidance for Q2 and H2:11. Jefferies believes e Catcher derives 35% of its sales from Apple.

Jefferies iPhone build estimates for CQ3 (Sep) includes 5M to 10M 4S models to be built.

"Overall builds for the quarter should be solid as well, providing respite from the steady downtick of recent months. Additionally, based on our checks we believe that iPhone 4S, iPhone 4, and iPhone 3GS builds for the September quarter are 17M to 19M up sequentially from the 16M build in June. We believe this is the first major uptick since February of this year," the analyst noted.

For more ratings news on Apple click here and for the rating history of Apple click here.

Shares of Apple closed at $315.32 yesterday.

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