Jefferies: Strength In Handset Suppliers Bodes Well For AAPL, MMI

Jefferies reports that it believes the “strength seen by the handset suppliers bode well for Apple AAPL and Motorola Mobility Holdings, Inc. MMI.” “Also, the wafer bank inventories indicate that they will not be overly supply constrained for Q2; however, we believe this likely comes at the cost of lower GM as our checks indicate OEMs paid up to secure components in the face of possible constraints, especially later in Q2 or in Q3,” Jefferies writes. “Our Q2 GM estimates are 140bp and 180bp below the St for AAPL and MMI, respectively. Also, we believe HTC's strength contributed to weak sell-through of MMI handsets, leading to higher channel inventories and pressuring Q2 sell-in.” Apple closed Wednesday at $336.13; Motorola Mobility Holdings closed at $23.11.