“From our understanding, the reason for the reduction is not demand related but rather due to the upcoming 6th generation iPhone refresh likely in the September-October timeframe,” Wu explained. “It appears that AAPL is opting to be conservative with its suppliers to factor in a potential 2-quarter pause ahead of the refresh and also to manage inventory. We believe this helps explain why its June quarter guidance was somewhat more conservative.” The analyst went on to state that the opposite is occurring with Apple’s iPad tablet, which is seeing increased build plans. Shipments of the device were previously held back due to supply constraints on its new Retina Display, although it has been “greatly improved with an additional supplier.” Wu believes that this will help Apple to better meet the strong demand for its iPad. For the June quarter, Wu reduced his iPhone forecast from 28 million units to 27 million, and raised iPad shipment expectations from 14 million to 15 million units. Due to improved iPad profitability, the analyst is increasing his gross margin assumption from 42.5% to 43.5% and forecasting $36.1 billion in revenue and $10.16 in EPS. Wu reiterated his Buy rating on shares of Apple stock, as well as his $780 price target.