iPhone 5 rumors: potential supply constraints could boost Apple stock price

The Wall Street Journal recently reported that Sharp’s production of displays for the new iPhone has fallen behind schedule due to low production yields.

However, analyst speculation doesn’t find the situation too bleak.

Analyst Rob Cihra of Evercore Partners writes that Apple stock performed 2.2 times better in the quarter after the company announced constraints in the iPhone supply.

The shares also performed 1.2 times better in the quarter after supply of the iPad was constrained.

The June 2010 quarter saw both the iPhone and the iPad constrained and the company’s stock price grew 26 percent over the following three months.

But in October 2011 neither the iPhone, nor the iPad were reported as constrained by Apple and the stock remained constant in the quarter that followed.

The analyst believes that the stock performance could depend on customers’ choice to wait for an Apple product rather than choose a device from a competitor.

Cihra also notes that investors are aware of this aspect and adds that in the case supply exceeds demand, investors can imagine what numbers could have been if Apple had met supply.

He also estimates that 24 million iPhones will be sold in the September quarter, which is a 39 percent year over year growth.

In the holiday quarter, sales of 49 million units could set a new record for the company but even with these numbers, he believes demand will exceed early supply.