Apple Stock Forecasted to Rise as Lifetime iPhone Sales Reach 1 Billion

Apple will report its fiscal third quarter earnings results tomorrow, and both the company and analysts project a year-over-year decline in iPhone sales and overall revenue for a second consecutive quarter.

iphone6design
Apple expects third quarter revenue of between $41 billion and $43 billion, which would be up to 18 percent lower than the $49.6 billion in revenue it posted in the year-ago quarter. The consensus among analysts is around $42.1 billion in revenue, which is essentially the midpoint of Apple's guidance.

Analysts estimate that Apple sold at least another 40 million iPhones during the June quarter, raising lifetime sales of the smartphone to some 987 million. Applying that sales rate to July -- just over 13 million iPhones per month -- it is likely that Apple will have sold its billionth iPhone between now and the end of this month.

1-billion-iPhones
The milestone comes at a time when iPhone sales are on the decline for the first time since the smartphone launched in 2007, an arguably inevitable lull following the smash-hit success of the larger-screened iPhone 6 series. The decline has affected Apple shares, which are down around 21 percent from a 52-week high of $123.91.

Nevertheless, many Wall Street firms expect iPhone growth to resume in 2017. The good news could extend to Apple's stock, as The Wall Street Journal yesterday reported that its "shares have been punished more than enough" and are due for a rally. It said the decline in iPhone sales "appears priced in."

Still, Apple has been punished more than enough. The iPhone slump appears priced in. And while the next iPhone, expected later this year, likely won’t be a significant upgrade, there is optimism that sales growth will soon bounce back. Analysts forecast iPhone unit sales will rise 5% for fiscal 2017, which ends next September.

After briefly touching the $100 mark last week for the first time since early June, Apple shares are currently trading around the $98 mark, a price that some analysts feel undervalues the company.

Apple analyst Brian White of Drexel Hamilton reiterated his "buy" rating for AAPL today, based on a projected price target of $185. UBS analyst Steven Milunovich also issued a "buy" rating today with a 12-month price target of $115.

Apple is expected to introduce a wide range of new products in the second half of 2016 that could further raise its stock price, including the iPhone 7, Apple Watch 2, and long-awaited 2016 MacBook Pro.

Apple's third quarter earnings results will be released at 1:30 p.m. Pacific Time, followed by a conference call with CEO Tim Cook and CFO Luca Maestri at 2:00 p.m. Pacific Time. MacRumors will be providing live coverage of the news.

Update: BGC analyst Collin Gillis has, to the contrary, downgraded AAPL to a "sell" with a lower price target of $85. Apple shares are down nearly 1 percent in intraday trading, now hovering closer to the $97 mark.

Tag: AAPL

Top Rated Comments

keysofanxiety Avatar
94 months ago
Preposterous numbers. I bet Ballmer's not laughing now.

Score: 17 Votes (Like | Disagree)
keysofanxiety Avatar
94 months ago
2012 Samsung Galaxy S3 (Big screen)
2014 iPhone 6
2015 Samsung Galaxy S6 Edge
2017 iPhone 7 (Edge screen)
Samsung better come up with something new in 2017 or the iPhone will continue to decline in 2019
2012 Samsung Galaxy S3 (Laggy as hell)

2015 Samsung Galaxy S6 Edge (Still laggy as hell)

That's kind of what's important.
Score: 6 Votes (Like | Disagree)
djcerla Avatar
94 months ago
No, shares have not been punished enough, it will go down more after 3Q earning results. Iphone 8 with OLED is still too far away.
Given Apple has not warned otherwise, they will report numbers in line with guidance.

So, any disappointment would be a minor disappointment that will push the stock lower for some days, only to recover shortly after given the almost unbelievably low P/E.

But even a very small beat would translate into a much bigger leap up, that would continue down the quarter, because the stock is so severely undervalued now (current valuation assumes Apple's business would shrink 95% in 10 years, which is not realistic).

Summing up, it's riskier to bet against AAPL this time.
Score: 4 Votes (Like | Disagree)
StevieD100 Avatar
94 months ago
2012 Samsung Galaxy S3 (Big screen)
2014 iPhone 6
2015 Samsung Galaxy S6 Edge
2017 iPhone 7 (Edge screen)
Samsung better come up with something new in 2017 or the iPhone will continue to decline in 2019
Sorry, but nothing Samsung does makes me even think about buying one. I vowed to never buy anything with a Samsung label on the outside after having almost a whole batch of HDD's go bad within a few weeks. Had real issues getting the warranty honoured.
As for the Edge Screen, totally useless for me.
Score: 4 Votes (Like | Disagree)
EricTheHalfBee Avatar
94 months ago
This is why I laugh at people claiming Apple is in trouble for relying on the iPhone for most of their revenue. Even if iPhone sales stop growing, Apple could still sell 250 million a year to people upgrading from 2-3 year old devices. Apple would have $150-200 billion in revenue just from regular upgraders. Companies would KILL to be in a position that generated that much cash flow and profit on a consistent basis.

Meanwhile, Google makes 90% of their revenue from ads, yet nobody calls them out for relying to heavily on one product category.


Oh, and there's one more huge difference between someone like Apple and Google. Apple makes money selling things people WANT/DESIRE. Google makes their money selling things (ads) people DESPISE. Pretty clear who's on shaky ground.
Score: 4 Votes (Like | Disagree)
EricTheHalfBee Avatar
94 months ago
So its looking like smartphones in existance-

• 400m iPhones (approx)
• 1.4B android

Total 1.8B
World population 7.4B

about 1 in 4 of the World population own a smartphone.
That 400 million number is way too low. The last 3 years Apple has sold 590 million iPhones, and it's safe to say that those would all still be in use.
Score: 4 Votes (Like | Disagree)

Popular Stories

iOS 17

Apple Releases iOS 17.0.2 and iPadOS 17.0.2 for All iPhones and iPads

Tuesday September 26, 2023 12:47 pm PDT by
Apple today released iOS 17.0.2 and iPadOS 17.0.2 updates, with the software coming five days after the releases of iOS 17.0.1 and iPadOS 17.0.1. Today's iOS 17.0.2 and iPadOS 17.0.2 updates arrive as build 21A351 and can be downloaded on eligible iPhones and iPads over-the-air by going to Settings > General > Software Update. Note that iOS 17.0.2 was previously made available for iPhone...
Apple WWDC23 macOS Sonoma hero

macOS Sonoma Launching This Week With These New Features

Sunday September 24, 2023 12:45 pm PDT by
Apple previously announced that macOS Sonoma will be released this Tuesday, September 26. The free software update includes many new features and changes for the Mac, including the five that we have highlighted below. In addition to these five features, we have shared the full release notes for macOS Sonoma below for a complete overview of everything new. Desktop Widgets macOS Sonoma...
iPhone 15 Pro Lineup Feature

Kuo: iPhone 15 Pro Overheating Issues Likely Due to Thermal Compromises, Not 3nm Node

Tuesday September 26, 2023 9:12 am PDT by
Complaints about heat issues with the iPhone 15 Pro models are not related to TSMC's 3-nanometer node that was used for the A17 Pro chip, according to well-respected Apple analyst Ming-Chi Kuo. Kuo says that overheating could be caused by "compromises made in the thermal system design" that allowed Apple to cut down on the weight of the iPhone 15 Pro models. Kuo says that the reduced heat...
iPhone 16 Side Feature

iPhone 16 to Include an Additional Capacitive 'Capture' Button

Monday September 25, 2023 12:50 pm PDT by
The iPhone 16 series is expected to gain an additional capacitive button, known internally as the "Capture Button." Codenamed "Project Nova," the button is likely to be one of the main selling points of the iPhone 16 lineup, assuming it gets past the initial testing phase. The Capture Button is located on the same side as the Power button, only positioned slightly lower - where the mmWave cutout...
ipad mini blue

Apple to Launch iPad Mini 7 Later This Year, Industry Report Suggests

Monday September 25, 2023 3:16 am PDT by
Apple could be preparing to release a seventh-generation iPad mini before the end of the year, based on a new report by DigiTimes. In an article discussing stagnating global tablet demand in the second half of 2023, the Taiwan-based outlet forecasts an uptick in Apple's share of the market owing to orders for a "small-size" iPad in the fourth quarter. From the report (see bold): In the...
macos sonoma 4

Apple Releases macOS Sonoma With New Widget Features, Safari Updates, Screen Sharing Improvements and More

Tuesday September 26, 2023 10:01 am PDT by
Apple today released macOS 14 Sonoma, the newest version of the operating system that runs on the Mac. macOS Sonoma has been in beta testing for several months, and it is compatible with the 2019 and later iMac, the iMac Pro, the 2018 and later Mac mini, the 2018 and later MacBook Pro, the 2019 and later Mac Pro, and the Mac Studio. The ‌macOS Sonoma update can be downloaded for free on...