“BMO Capital Markets’ Tim Long takes a fresh look at Apple on Monday through a new ‘one stock, one theme’ series, focusing on Apple’s iPhone installed base,” Teresa Rivas reports for Barron’s.
We estimate total iPhone installed base hit 715 million, including 228 million of second-hand devices, in December 2016, with year-on-year growth of 20%. We model year-end installed base to grow 13% in CY17 and 9% in CY18. We estimate, by the end of 2018, there will be 300 million second-hand iPhones in use.
We are refreshing our highly granular iPhone installed base model. We estimate 31% of the new phone installed base will be 2 years or older at the time of the September 2017 launch event. Although refreshment cycles are lengthening to 2.5+ years, which means not everyone will take advantage, the availability of un-upgraded phones will serve as a tailwind as Apple launches the new models. — BMO Capital Markets analyst Tim Long
“Long writes that while the target of doubling service revenue is ambitious, it’s still achievable,” Rivas reports. “Long has an Outperform rating and $160 price target on Apple.”
Read more in the full article here.
MacDailyNews Take: Apple’s Services business is actually much larger than most people think since Apple only quotes the one-third the company takes of total purchases. Doubling it in 4 years seems eminently doable.
SEE ALSO:
Citi ups Apple price target to $160 on impending iPhone supercycle – March 6, 2017
One of the things that may be lengthening the upgrade times are the Apple Watch, and maybe the iPad Pro. I put of getting a new phone to get a Watch. It was an upgrade to my 5s in that I had Apple Pay among other things. I am still putting off an upgrade to a 7 because I may get an iPad Pro. With the Pencil it is the closest to writing on paper. Most people can’t afford all of them. However the people who get a Watch instead of a iPhone are almost assured to stay in Apple world with the next iPhone upgrade. That is one of the most important things when it comes to services.
My daughter got a new iPad Pro and MacBook Air for her birthday, she is over the moon. She loves them as most of her friends using the MacBook Air.
I don’t use a single one of Apple’s chargeable services. It’s not on purpose, they’re just not useful.
I use OneDrive because it is free with Office (which I have to have since Pages was dumbed down) and I have a huge music library on CD (mostly classical). I don’t watch movies as a rule either.
Corporations love to get you on the hook for monthly payments. I try to avoid it.
I’m not a typical Apple customer. I have 2 macs (MacBook, Mac Pro), iPad Air and two iPhones. But no paid services. I don’t even use ApplePay though it’s on my phone.
Apple is changing under the accountant CEO, turning into a money-grubbing business rather than an admired technology leader. Microsoft is now much more responsive to their pro users than Apple is.
And I would consider an android phone. I’m in Spain. Apple Maps is COMPLETELY USELESS here. I hate Google but I have google maps on my phone now. That was hard to swallow but Apple maps is so stupid you would think it had been designed by Donald Trump.
Would I pay Apple anything on a monthly basis? I pay Microsoft for Office365 so it’s possible. But they don’t offer anything useful or attractive to me.
I don’t see that changing.