RBC Capital Markets


'RBC Capital Markets' Articles

Over Half of Prospective iPhone X Buyers Surveyed Plan to Choose 256GB Storage

iPhone X with 256GB storage is the most popular device among prospective smartphone buyers, according to a survey conducted by RBC Capital Markets. Of the 832 individuals surveyed, 28 percent said they plan to purchase iPhone X as their next smartphone. An additional 20 percent of respondents said they intend to buy iPhone 8 Plus, while 17 percent will go for iPhone 8. The remaining 35 percent of consumers plan to purchase an older model, ranging from iPhone 6s to iPhone 7 Plus. RBC Capital Markets said 43 percent of prospective buyers interested solely in a new iPhone are looking to purchase an iPhone X, while 32 percent favor iPhone 8 Plus, but no accompanying chart was provided for this data. A majority 57 percent of respondents who plan on purchasing iPhone X will opt for the 256GB model, which costs $1,149 in the United States. 43 percent said they will buy the 64GB model for $999. By comparison, 50 percent of iPhone 7 respondents last year opted for 128GB, which was the middle tier between 32GB and 256GB. RBC Capital Markets analyst Amit Daryanani:Interestingly, Apple has removed the middle-tier storage option from iPhones. We think that given increasingly greater storage requirements, most of mid-tier storage users will move towards the higher tier.46 percent of a larger pool of 4,196 respondents said wireless charging is iPhone X's most attractive feature. Overall, RBC Capital Markets expects strong demand for iPhone X, which should increase Apple's average selling price for iPhones in general. The investment bank remains upbeat about

Bullish Analyst Says Apple Has Potential to Become Trillion Dollar Company Within 18 Months

Apple has the potential to become a trillion dollar company by 2019, according to RBC Capital Markets analyst Amit Daryanani. In a research note on Monday, Daryanani said Apple could reach or exceed a trillion dollar market cap within the next 12 to 18 months. An excerpt from Daryanani's research note, edited slightly for clarity:In aggregate, we see a scenario where in the 2019 fiscal year, Apple sustains $12+ earnings per share and, assuming the valuation frameworks remains stable/improves, it should get AAPL stock toward $192–$195, which would equate to a market cap above $1 trillion.Daryanani believes the so-called "iPhone 8" and the upgrade supercycle it's expected to drive will be a major catalyst towards Apple's path to a trillion dollar valuation. Looking further ahead, he thinks there is potential for Apple to continue growing its Services category revenue by double digits year over year.Longer-term, we think there is potential for Apple to continue growing Services revenue by double digit year-over-year given the company's expanding installed base [of devices], increasing App Store sales within the current installed base, demand for cloud storage/compute services, and further adoption of Apple Pay.Apple's Services category brought in $7.17 billion last quarter, from $6 billion in the year-ago quarter, representing 18 percent year-over-year growth. Apple CEO Tim Cook said the Services category is already the size of a Fortune 100 company, with hopes to double the category's revenue by 2020. Earlier this month, Apple's market cap surpassed the $800 billion

RBC Raises Price Target on Apple Shortly After Dreaming About Benefits of a Merger With Disney

RBC Capital Markets raised its AAPL price target to $157 today, up from $155, as it believes iPhone sales were stable to modestly better than expected in Apple's second quarter, which ended on March 31. The investment bank's lead Apple analyst Amit Daryanani said the company's iPhone mix continues to remain positive, with "more" Plus-sized models sold in the quarter than it previously forecasted. iPhone 7 Plus models carry a $120 premium over iPhone 7 models, contributing to a higher average selling price. RBC now estimates Apple will report quarterly revenue of $53.5 billion, matching the high end of the company's guidance. Apple is scheduled to report its second quarter earnings results on May 2 at 1:30 p.m. Pacific Time. MacRumors.com will provide live coverage of Apple's conference call at 2:00 p.m. Pacific Time. The bank said it remains positive about AAPL based on so-called "iPhone 8" refresh cycle tailwinds, benefits from a possible capital allocation increase, the acceleration of its growing Services category, and potential upside from U.S. Donald Trump's political agenda in relation to taxes and cash repatriation. Apple's stock price has been rising steadily since November, as rumors suggest the company will launch its first iPhone with an OLED display and slim bezels, potentially mirroring the design of Samsung's new Galaxy S8. Many analysts have maintained a "buy" or equivalent rating on AAPL since March or earlier. Last week, RBC Capital Markets generated headlines when it outlined the potential benefits of a completely speculative Disney

Survey Suggests 'iPhone 6s' Could Outsell iPhone 6 and iPhone 6 Plus

While every new iPhone model released has gone on to outsell its predecessor, dating back to the iPhone 3G outselling the original iPhone, the overwhelming success of the iPhone 6 and iPhone 6 Plus has created some skepticism about whether Apple will be able to continue that trend in the future. The 4.7-inch and 5.5-inch iPhone 6 and iPhone 6 Plus have been popular among consumers because of their larger screens, a long-awaited hardware feature that was previously limited to Android-based smartphones and other devices. The new iPhones are also slimmer and feature faster A8 processors and improved iSight cameras. Nevertheless, a new survey from RBC Capital Markets suggests the so-called "iPhone 6s" could actually be more popular than the iPhone 6 and iPhone 6 Plus. The research firm expects positive year-over-year growth in the December quarter, claiming that carrier contracts are ultimately the deciding factor in a customer's upgrade cycle."While there has been concern regarding AAPL going ex-growth in Dec-Qtr, our survey work shows carrier contracts are the bigger driver for refresh cycles, implying 6s cycle should be positive given contract renewals and sustained expansion of 4G networking in China. We are raising our estimates ahead of Street expectations for June, FY15/FY16 but maintaining our OP rating and $150 target."RBC Capital Markets surveyed 6,000 individuals about their smartphone purchasing decisions and found that loyalty remains strong among Apple customers, meaning that the company should be able to increase iOS adoption and revenue going forward.

iPhone 6 Interest Remains Strong as Consumers Look to Larger Displays

Demand for the next generation iPhone remains strong in the months before its expected fall debut, claims a report from RBC Capital Markets analysts. According to a 4,000 person survey conducted by RBC, half of consumers who plan to upgrade their phone in the next three months intend to buy an iPhone and a quarter of those would be willing to pay $100 more for their iPhone to have a 5.5-inch screen over the other rumored size of 4.7 inches. Customers know about and are interested in the next iPhone, with 74 percent of survey respondents stating they are aware of Apple's possible fall iPhone launch and fifty percent claiming they are interested in buying an iPhone for their next phone. Primarily, customers are looking for performance improvements and a large screen in their next iPhone handset. While ~49% of smartphone purchasers are inclined to buy the next Apple product, we learned that the main driving factor for sales surround performance improvements (battery life 33%, processor 18%, camera 12%). In our view, these results are positive for AAPL, as we would not be surprised to see improvements to both battery life and processing speed with the iPhone 6. Finally, beyond performance improvements, we also learned that screen size could materially impact sales, as 23% of participants surveyed are inclined to purchase a larger screen iPhone. These customers not only want a larger phone, they also are willing to pay for it, with more than one quarter of respondents willing to pay a $100 premium to buy a 5.5-inch iPhone for $299 instead of the current $199 for the

Apple's Lower-Cost iPhone to Lack Retina Display?

RBC Capital Markets analyst Amit Daryanani has released a new research report today citing supply chain checks as the basis for predicting a June or July launch for both the iPhone 5S and a lower-cost iPhone, in line with other recent reports. Daryanani says, however, that the lower-cost iPhone appears set to omit a Retina display.Our supply-chain checks indicate that AAPL is working to launch multiple new phones in the June/July time-frame this year. Specifically, AAPL will launch the iPhone5s and a more affordable but lower-end iPhone at the same time, in either late CYQ2 or early Q3. The low-end iPhone will have the same 4" form factor as the iPhone5 but will have plastic casing and no retina display. With a lower price-point, AAPL will be able to target a growing and important part of the Smartphone market (sub-$400 price-band).Daryanani's claim of no Retina display for the lower-cost iPhone conflicts with reports from reliable KGI Securities analyst Ming-Chi Kuo, who has claimed several times that the cheaper iPhone's 4-inch display will carry the same 326 pixels per inch seen on all Retina iPhone displays released to date. Daryanani's claims also raises suspicion because Retina displays are a long-established feature of Apple's iPhone lineup, with all the iPhone models currently offered by Apple supporting the feature. This includes the iPhone 4, which is offered for free with a two-year contract in the United States, although this new low-cost iPhone is said to be seeking to bring prices even lower to attract customers in markets where carrier subsidies are

Analyst Says Apple Accelerating Plans for Next-Generation iPad Mini Launch

CNET reports on a research note from RBC Capital Markets analyst Doug Freedman claiming that Apple appears to be accelerating its plans for the second-generation iPad mini, although it remains unclear when Apple is looking to launch the device.RBC Capital Markets analyst Doug Freedman -- who is in China visiting chip companies this week -- offered this ambiguous Apple note: "iPad Mini Gen-2: Apple's gen-2 iPad mini is getting pulled-in, and is likely to have several new suppliers, with TXN gaining content." "Pulled in" would seem to imply that Apple is moving up introduction of the next iPad Mini. That would be helpful if we knew when the gen 2 Mini was actually slated to ship in the first place. As the current iPad Mini is still in short supply, we may be getting a little ahead of ourselves.Apple introduced the iPad mini just under two months ago, and the company is still quoting one-week shipping estimates for new orders through its online store as supplies are expected to remain tight into 2013. One of the most significant criticisms of the iPad mini has been the lack of a Retina display as found on the full-size iPad and on smaller devices like the iPhone and iPod touch. There has been a fair amount of discussion about just when Apple will add a Retina display to the iPad mini, depending on when technology allows the company to include the feature without too much in the way of price, size, or weight concessions. One rumor has claimed that Apple will indeed be including a Retina display in the next-generation iPad mini rather than waiting for a third-generation

Apple Requiring an 'Innovative, Category-Killer Experience' for Potential Low-End iPhone

Barron's reports on a brief note from RBC Capital Markets analyst Mike Abramsky, who shares some of his "takeaways" from a meeting with Apple Chief Operating Officer Tim Cook and Chief Financial Officer Peter Oppenheimer. According to the note, Cook and Oppenheimer continue to believe in a "massive opportunity" for Apple in China, seeing the potential for significant growth there with the company's recent explosion to $9 billion in annual revenue for the market being only the beginning. Many have viewed the introduction of a low-cost iPhone for the prepaid market to be key for Apple's future success in China and many other countries, and the Apple executives reportedly noted that any such device would have to be "an innovative, category-killer experience". Cook and Oppenheimer obviously did not specifically confirm plans to launch a low-cost iPhone, but it is clear that Apple is working hard on finding a way to break into and succeed in that market.They include the fact that Apple has a “massive opportunity” in China, with the market there “significantly untapped” despite Apple revenue of $9 billion in the country. Despite an “explosion” of devices based on Google’s (GOOG) “Android” operating system, Apple can maintain a competitive advantage through its integration of hardware and software, and its “curation” of the “application ecosystem.” Regarding a low-cost iPhone, Abramsky writes that “Apple’s primary criterion for launching a lower-end iPhone is an innovative, category-killer experience.”Other topics of the discussion included word that Apple's gross

Apple to Cut iPhone 3GS Price to Free With Next Update?

With talk of Apple seeking to release a cheaper iPhone being revived in recent days, RBC Capital Markets analyst Mike Abramsky now weighs in to report that he believes that Apple will be keeping the iPhone 3GS around even after the next iPhone hardware update, offering the device for free with a two-year contract and at $399 for unsubsidized purchases. Apple currently sells an 8 GB iPhone 3GS for $49 on a two-year contract and $449 unsubsidized.As its entry-level iPhone strategy, Apple is expected to cut iPhone 3GS to $0 (on contract, $399 unsubsidized) in conjunction with iPhone 5 launch (we continue to expect it in September). This approach is intended to target mid-market smartphone buyers and counter Android's mid-market expansion. We expect iPhone 5 to launch at $199/$299 ($599/$699 unsubsidized), and Apple to drop iPhone 4 pricing to $99 ($499 unsubsidized).The claimed $399 price point for the unsubsidized iPhone 3GS is a bit higher than other reports have been hinting at, with the analyst report from earlier this week suggesting that Apple would try to come in at $349 for its cheaper iPhone. Earlier reports had claimed that Apple was working on a smaller iPhone form factor that could allow the company to offer the device for as little as $200 unsubsidized. But while some rumblings of a new, smaller iPhone option for this year continue to float around, Abramsky believes that the "baby iPhone" will not be released until 2012, in part to fully take advantage of iCloud leverage that may not be possible as the service