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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

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34 months ago
Preposterous numbers. I bet Ballmer's not laughing now.

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Rating: 17 Votes
34 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.
Rating: 6 Votes
34 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.
Rating: 4 Votes
34 months ago
A $185 price target is pretty insane when you consider the huge numbers we're talking about here. I'm not betting on iPhone sales increasing in 2017 if Apple plans to release an iPhone 7 this autumn which looks largely the same. Perhaps the dual-camera system will be insane enough to raise a good chunk of buyers up to the Plus pricing tier, or maybe the water proofing for some, but I think the real growth will come after the rumored 10th anniversary full redesign.

There's also a good chance the markets could see a lot of turmoil from the election this autumn. Coupled with many people in China taking out aggression on Apple due to the recent South China Sea international ruling, and I think the outlook for the next year isn't all that great. Then there will also be the people freaking out about the lack of a headphone jack and refuse to buy it, but will eventually come around in subsequent years after everyone has removed it. So after 2017? Much better outlook. I think a price target of $150 is reasonable a few years from now, especially if Apple can better lock down the wearables market with a more mature Apple Watch. I'm holding out on reinvesting for now, but what do I know? I'm no expert. Although many of these so-called "experts" are often miles off target.
Rating: 4 Votes
34 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.
Rating: 4 Votes
34 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.
Rating: 4 Votes
34 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.
Rating: 4 Votes
34 months ago
And so? Nobody cares about how many phones you sold. I mean Samsung has sold billions of phones in the same time period, doesn't mean their company is worth more.

Investors impressed at a company that crosses some arbitrary milestone, but fails to realize that iPhone sales have tanked in the past year is what is wrong with the stock market today. Everybody is impressed with fantasy, but facts does not factor into the real value of a company.

This company is simply not offering us a taste of what is next for them. Auto rumors are forecasting something in 2021, in the meantime all Apple has to rely on is iPhone sales, which are slipping and the iPhone 7 appears to be another dud model of mild upgrades over the previous generation which consumers are already very bored of. In addition every other product sector Apple is in is in decline, even Samsung's smartwatch market is in a growth stage while Apple's is in decline.

This company is slipping down the slope of mediocrity very quickly, unless there are some spectacular product rollouts in the next year, I think investors are eventually going to catch up to the reality that Apple is a pale imitation of what it once was.
Rating: 3 Votes
34 months ago

The facts is that they're not declining; they're actually way up.

The larger screens of the iPhone 6 and 6+ were delayed to such an extent that the demand for that product must be seen as a blip.

The trend line traced from iPhone 5S to 6S is a very healty one.

In fact, P/E was completely out of industry average (much lower) even at the $130 peak, with surging revenues and earnings.


The fact is the decline is in earnings and revenue for last quarter and this quarter, year over year. Markets don't see this a blip. The see them as realities, which they are.

PE is a trailing indicator based on the last four quarters of earnings versus the current price and is an indicator of market sentiment with respect to future growth. A company with negative revenue and earnings growth can be expected to sell for low multiples. If you are going to cite PE, it helps to know what it means.
Rating: 3 Votes
34 months ago
The lull in sales would not have to be "inevitable" if they applied a little more imagination. They could build a rugged iPhone version that's thicker and tougher and has better battery life for people who work outdoors or in trades that need a tough phone that can be away from the outlet for a couple of days--or for exasperated parents who don't feel like wasting their money experimenting on kid-proof cases.

I really think IPhones currently meet only one aesthetic sense with their slender delicate looks and pale colors. A rugged version in dark colors could fill a niche. It need not look like a truck tire, as that would be very unApple. It can still be relatively sleek and have clean lines, but made to take a few hits like some of the custom gear I have seen various places, like one I saw a paramedic using. At any rate, other than building a hideous battery case, I have not seen them attempt to address the consumers who are clamoring for more battery and say they would accept a thicker phone. They don't need to thicken the Plus into a brick. Modify something the size of the SE for starters.
Rating: 3 Votes

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