Shipments are reported to be approaching 3-4 million/month as production constraints ease



Photo: Apple Inc.

Following a mid second-quarter check with his sources in Apple’s AAPL supply chain, Sterne Agee’s Shaw Wu raised his unit sales estimates Friday as well as his price target: to $460 to $445. The stock, which has been impervious to the enthusiasms of sell-side analysts lately, closed Thursday at $340.53.

Among the highlights of the new report:

  • The production problems that hurt iPad shipments last quarter have “significantly improved,” writes Wu, “with better yields and higher output due to successful retooling and conversion of more production lines to iPad 2.” This would appear to contradict recent reports of shortages of both components and labor.
  • The iPad “still has a ways” to go to hit what Wu says is Apple’s goal of 3-4 million units per month by the second half of 2011, but is “getting closer.”
  • Demand for the iPhone 4 appears to be holding up better than expected, thanks to the belated launch of the white iPhone and what Wu says is “continued strong adoption” at Verizon VZ and Apple’s international markets.
  • “Channel feedback” on Apple’s recently refreshed Intel INTC Sandy Bridge quad-core iMacs is “strong,” leading Wu to believe Apple’s desktop Mac business, which had been “a laggard,” is set to rebound.

Wu’s new estimates for the quarter than ends June 25: 6.8 million iPads (from 5.9 million), 17 million iPhones (from 16 million), and 3.9 million Macs (from 3.83 million) and a gross margin of 39% (from 38.3%) due to improved iPad yields and higher iPhone sales.