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Apple ’s ( AAPL ) March quarter sales appear to be coming in at the low end of its guidance, based on demand and supply checks, according to Pacific Crest Securities. “Demand appears stable but soft, which prompts more-cautious estimates,” Pacific Crest analyst Andy Hargreaves said in a report Sunday. Hargreaves cut his iPhone unit sales estimate to 47.5 million from 49.0 million for the March quarter, Apple’s fiscal Q2. As a result, he lowered his fiscal Q2 revenue estimate to $50.0 billion from $51.3 billion and his EPS estimate to $8.73 from $8.89. Hargreaves also trimmed his price target for Apple stock to 127 from 132 but reiterated his overweight rating. Apple shares were down 1% to 102 in midday trading on the stock market today . “Despite this, we continue to believe valuation and the likelihood for strong growth in the iPhone 7 cycle make the risk/reward around AAPL attractive,” Hargreaves said. Apple customers largely are staying with the iPhone but waiting to upgrade to newer handsets, he said. Apple is likely to change its iPhone product lineup strategy with the expected launch of the iPhone SE on March 21. At launch, the new 4-inch iPhone will replace the iPhone 5S at the low end of the iPhone lineup. And this fall, it probably will take the place of the iPhone 6 as well, Hargreaves said. When Apple releases a new iPhone, it traditionally drops the price of the previous two generations of iPhone. But Apple likely will eliminate the iPhone 6 to avoid selling low-cost larger screen (4.7- and 5.5-inch) models. “Apple’s new ‘low-end’ iPhone, which we expect to launch on March 21, is likely aimed at maintaining differentiation in the lineup based on screen size, which should help avoid potential trade-down activity that would be a risk to gross margin,” Hargreaves said. The iPhone lineup this fall is likely to consist of the iPhone 7 series at the high end, the iPhone 6S series at the midrange and iPhone SE at the low end, he said. RELATED: How Much Will Apple Raise Its Quarterly Dividend? Apple iPhone Socked As Smartphone Market Hits The Brakes . Scalper1 News
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