Summit's Sundararajan: Apple Bears May Be Wrong

In a report published Thursday, Summit Research analyst Srini Sundararajan mentioned that Apple Inc. (NASDAQ: AAPL) bears could be wrong and that semiconductor used in the next version of the iPhone was expected to be significantly superior to the current iPhone 6.

Also, the analyst believes that bearishness on China warrants skepticism, given that "a) the US and the Chinese economies are tied to one another and that b) Chinese government cannot allow economy to sputter for long as there could be political problems which can be avoided by a timely stimulus."

While the iPhone 6s only has the force touch as a new feature, the analyst believes that the next iPhone would have semiconductor chips that would meaningfully enhance performance of the smartphone, as compared to the iPhone 6 and 6 Plus. This implies that the sales projections for the new iPhone could increase, as compared to the iPhone 6 and 6s.

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The A9 processor is to be fabricated at 14nm and is expected to be 20 percent more powerful, 25 percent more power efficient and 12-15 percent smaller than the existing semiconductor chip.

"In addition if AAPL chooses to increase clock frequency and the number of cores for Graphics and the main processor, there should be really perceptible difference in performance," according to the Summit Research report.

Also, Apple might increase its DRAM content to 2GB, which means that downloading apps and movies would become much easier, while image manipulation programs would work much faster.

"Simply, the 6s will have better computational horsepower which will make every function better. Which means a lot of programs will be faster and have better stability," Sundararajan stated, while adding, "Of course it remains to be seen if wireless charging is implemented as a standard."

While the camera is expected to help achieve DSLR quality images, the analyst expects eight to 10 days of standby battery life.

"iPhone 6s will be a success and will beat iPhone 6 in total sales and hence AAPL stock may now be at a favorable price point for longs due to the current short sighted consensus. AAPL is too astute a company to take any chances with its profit machine, Sundararajan added.