Topeka Capital Markets’s Brian White this morning reiterates a Buy rating on Apple�(AAPL) shares and a $1,111 price target, writing that his “checks” are “pointing to an insatiable appetite in both Hong Kong and China for the iPad mini, leading to further supply constraints in recent days,” following the introduction of the smaller iPad on November 2nd in the special administrative region and on December 7th on the mainland.
White says there have been stock-outs of the mini at Apple stores on the mainland and a complete sell-out at all three Apple stores in Hong Kong:
With the December opening of a new Apple retail store in Hong Kong (Causeway Bay) and a September opening in Kowloon, Apple now has three stores in Hong Kong versus just one store a year ago. Our checks indicate that the iPad mini sold out in Hong Kong this week for nearly all models, while the fourth generation iPad remains in stock. In fact, our research suggests the iPad mini is currently more popular in Hong Kong than the fourth generation iPad [�] In the December quarter, Apple opened new retail stores in Shenzhen, Chengdu and Beijing to expand its presence in China. As such, Apple now has eight retail stores in China versus five stores a year ago. Our research is pointing to very strong demand for the iPad mini in China and this is leading to stock-outs this week. Similar to Hong Kong, we are being told by contacts in China that the iPad mini is already more popular than the fourth generation iPad. Prior to the China launch, we indicated that the iPad mini would be the “next big thing in China” and we believe this phenomenon is starting to develop. In our view, the smaller form factor and lower price point will allow Apple to sell the iPad mini in more meaningful volumes versus the regular-size iPad.
The iPhone 5, moreover, has “met with strong demand,” after the older 4S was brushed aside by Samsung Electronic’s (005930KS) Galaxy S III and “Galaxy Note“:
After the Galaxy S III and Galaxy Note I/II became more popular than the iPhone 4S in recent months, our discussions now indicate that the iPhone 5 has recently become the most popular high-end smartphone at the resellers that we spoke with.
Apple shares today are down $2.76, or half a percent, at $512.30.
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