Component manufacturers have begun to receive orders for Apple Inc.'s iPhone 4S and the production ramp is expected to start in July for an iPhone 4S launch in September/October 2011, Jefferies said in a note to clients.

Our checks and guidance from Catcher Technologies indicate component orders beginning for the iPhone 4S. We could see an upside surprise to September iPhone orders. We believe iPhone units will reaccelerate due to: new lower-cost iPhone, iPhone 4S in the Fall followed by iPhone 5 in June 2012, and more carriers," said Peter Misek, an analyst at Jefferies.

Misek believes the likelihood of the iPhone 5 launch in September including LTE is now remote. According to his industry checks, the device should be called iPhone 4S and include minor cosmetic changes, better cameras, A5 dual-core processor, and HSPA+ support. He believes Apple had hoped for the LTE chipsets to be ready for the September launch as a best-case scenario but was planning a version without LTE called the iPhone 4S.
Apple said in a statement at the WWDC that its iOS 5 is not ready to roll out until fall. Fall sets in, in the third week of September and it refers to a time frame until November end. If Apple gets iOS 5 ready later in the fall, then iPhone 5 will have to take the lag as well.

"As expected, the WWDC keynote focused on software and cloud services with mostly me-too capabilities announced. We expect this to be Apple's first round of cloud service announcements with round two in the Fall (likely focused on video) and round three in 2012," said Misek.

Misek expects the launch of a low-cost iPhone in the fall that is targeted at prepaid and emerging markets. He had thought Apple would differentiate the new low-cost iPhone (likely a costed-down version of the 3GS) by not having iOS 5 available for it (he was also concerned that the hardware might not be up to speed).
In addition, Misek believes this fall the iPhone 3GS, 4, and iPhone 4S will be able to run iOS 5, which will be necessary to run the new cloud-based services. This will maintain the unity of the Apple iOS code base, and likely increase low-cost iPhone shipments, but likely greater cannibalization of higher-end iPhones as differentiation is lessened.

"Based upon our checks and public comments by Verizon and others, we are in the camp that expects only an incremental iPhone upgrade (iPhone 4S) this September, which includes a dual-core processor and improved imaging. We expect the iPhone 5 to arrive by next January, which will include 4G and ca... [ Read More (0.4k in body) ]