Challenges Still Ahead; Reiterate Sell
• Inventory to weigh on revenue over the next several quarters We believe it will take several quarters to normalize current channel inventory (UBS estimates: ~800k), which, in turn, will likely weigh on revs until the Nov quarter. We assume a modest AT&T unit launch in the May quarter and, in the Aug quarter, expect challenges against a new iPhone launch (June) at AT&T. Our current estimates reflect a more aggressive June push by Verizon Wireless (to counter AT&T’s iPhone launch), which will help to burn down some inventory. Sell-through (rather than sell-in) will be key to determining the Nov quarter trajectory (limited visibility).
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