Piper Jaffray's Gene Munster remains bullish on Apple amid iPhone 6s production cut reports

2014 image of Piper Jaffray analyst Gene Munster via Business Insider

2014 image of Piper Jaffray analyst Gene Munster via Business Insider

On yesterday's AWT News Update, one of the stories covered dealt with a news report from Nikkei Asian Review that Apple was planning to cut iPhone 6s and 6s Plus production by 30 percent during the first calendar quarter due to higher than anticipated levels of inventory. That report promptly caused Apple's share price to fall (it's currently trading at about $102 per share after dropping to the $100 level earlier this morning). That news has shaken up a lot of Wall Street analysts and investors, but the news may not be as bad as it seems.

The Nikkei report noted that Apple products are still popular and that the company expects to bump production levels back to normal during the second calendar quarter of 2016. But another report -- this one from The Wall Street Journal -- notes that the city government of Zhengzhou, China (the location of a Foxconn plant) is going to provide $12.6 million to iPhone manufacturer Foxconn in order to avoid layoffs during the production cut. Sounds pretty dire, doesn't it? 

Piper Jaffray's Gene Munster always seems to look at Apple a bit differently than most Wall Street analysts -- for example, he insisted for years that Apple was going to be producing a HDTV -- and his take on this situation is much more positive. AppleInsider yesterday published a note to investors from Munster, who said "We believe the December guide implies slight growth of iPhone y/y including Tim Cook's specific mention that iPhones would grow y/y... Overall, this data point, albeit old, lends us confidence that March may not be as bad as expected assuming that if iPhone demand is up slightly in December and the overall smartphone market is stable with a large upgrade base of existing iPhone users, we would expect narrower change in the December and March growth rates."

The "specific mention" Munster refers to was the guidance provided to analysts during the FY Q4 2015 earnings call in October, 2015. Piper Jaffray is still keeping the faith in Apple, and shows a current price target of $179 per share. Whatever the situation, we're sure to hear more on Tuesday, January 26 during Apple's Q1 2016 earnings call.