iPhone 5S may arrive in the middle of the year in multiple shades, two sizes

by Gareth Mankoo

Speculation tastes good when it comes with an Apple flavor. Stirred into motion by Topeka Capital Markets analyst, Brian White, the idea of the iPhone 5S arriving in a few months is simply believable. The expected price would hover around a whopping $1,111. “Apple is our top overall pick for 2013,” White wrote in a note to investors on Wednesday that discussed Topeka’s stock picks moving into the new year. “With the 25% correction in Apple’s stock from the high in September, the stock is now trading at just 7.7x our CY13 EPS estimate (less cash) and the company’s portfolio has never been stronger, in our view.” He continued, “We believe tax-related selling was largely to blame for the downward bias in the stock price as we exited 2012 and this created a negative news cycle around Apple that we believe will be broken as we enter 2013. We believe there is still plenty to look forward to at Apple, including the potential for greater choices (i.e., colors, sizes) around the next iPhone in 2013, combined with accelerating momentum with the iPad mini and continued strength with the iPad franchise at large.”

The idea of an iPad Mini that is currently outselling the full-size version in China is another interesting insight that White shed light on. “Our checks indicate that the next iPhone will have more choices for customers,” he said. “This entails an expansion in both the color patterns and screen sizes with 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.” The five colors that are expected from the next iPhone will be pink, yellow, blue, white & silver and black & slate and two different screen sizes to go with it. “Our checks are also indicating that the next iPhone will offer customers more choice in terms of screen size,” White reported. “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.”