Analyst wonders whether iPhone sales growth has peaked

“Welcome to the great iPhone debate of 2015: Have sales of the larger-screened phones peaked?” Tim Higgins reports for Bloomberg. “A day after Apple Inc. posted a 33 percent jump in quarterly earnings, shares rose and fell on Tuesday as investors questioned whether Chief Executive Officer Tim Cook can keep iPhone sales roaring and continue to turn in revenue growth in excess of 20 percent a quarter.”

“‘Potential upside from iPhone seems to be waning and we see more risk to consensus F2016 estimates than upside opportunity,’ Andy Hargreaves, an analyst at Pacific Crest Securities, wrote in a note to investors. Analysts’ consensus estimates for next year anticipate ‘iPhone, iPad and Apple Watch unit sales that are at the high end of or above what we believe is likely, which suggests our expectations are meaningfully low or new categories are needed to make up the difference,’ Higgins reports. “Indeed, Apple will face tough year-over-year comparisons in the next fiscal year, when there won’t be the same pent-up demand for Apple’s first large-screen iPhones, according to a report by Bloomberg Intelligence.”

“Apple, for its part, says the momentum will continue. The iPhone 6 and 6 Plus, which debuted in September, helped boost Apple’s phone unit sales for the recent quarter by 40 percent globally and more than 70 percent in China, where the new larger screens are especially popular. Apple estimates that only 20 percent of its active installed base of iPhone users has upgraded to the new device,” Higgins reports. “The company forecast revenue will rise 23 percent to 28 percent in the current period from a year earlier. That outlook suggests iPhone sales may rise 31 percent this quarter to 46 million, Piper Jaffray’s Munster wrote in a note to investors Monday.”

Read more in the full article here.

MacDailyNews Take: We have to conclude that either Andy Hargreaves is gambling that something unforeseen will happen that will make him look like genius or that he’s simply not a smart man. At this time, we lean heavily towards the latter.

When Tim Cook says publicly that the data to which he’s privy suggest “there’s plenty of upgrade headroom” to iPhone, we recommend that analysts listen to him versus coming up with their own cockamamie theories of “waning” based upon, you know, “seems.”

Hargreaves’ load, er… note has been iCal’ed for future reference.

Oh, by the way:

This genius Andy Hargreaves told his clients, who must be braindead to employ Andy, to sell their shares of Apple Inc. one week ahead of Apple’s unveiling of iPhone 6 and iPhone 6 Plus. At the time, AAPL had dropped under $100 per share.

Related article:
Apple drops below $100 as Pacific Crest Securities advises selling shares now – September 3, 2014

25 Comments

    1. For all their education and experience, most analysts suffer from a serious case of myopia (tunnel vision).

      What these analysts fail to recognize is the dramatic new use cases that Apple has developed for the iPhone.
      1/ Apple Pay. Just how important is Apple Pay to the future of mobile pay? Best Buy, one of the founders of the CurrentC initiative, has announced that it will begin accepting Apple Pay, in bio;atop of the CurrentC Agreement.
      2/ Required host for Apple Watch. Apple Watch is going to be a much larger deal than even the most optimistic believe. When hospitals are integrating their digital record keeping to Apple’s Healthkit (and in some cases giving the Apple Watch to some patients) you know this is going to be huge. Couple those initiatives with Apple Pay, PassBook, Homekit and Researchkit, the use case for Apple Watch is off the charts (and everyone of them requires an iPhone 5S or better).

    2. I “wonder” if my fingers will stink if I scratch my ass. Doesn’t mean my idiotic mind masturbation is worth my time to write down, or anyone else’s time to read. Worthless tripe.

  1. Our guess is just as good or better than the analysts…just how long are people gonna keep trusting bozo the clown analysts??? Staying long in AAPL. Carl is starting to look pretty good, folks.

  2. To Tim Higgins: Timmy, have you forgotten about China? The market there is still expanding, and may soon surpass the USA in sales of iPhones. I also believe there is a large market for the rest of Apple’s products as well.

    And don’t forget about those switching to the Apple ecosystem, from the’Droid platform.

    🖖😀⌚️

  3. He’s as profoundly clueless as Colin Gillis. I saw the interview and, honestly, he looks like he’s intentionally fscking with AAPL. He just had this stupid smirk on his face the entire time. Very weird.

    1. They don’t have to. A 10% YoY increase in December quarter unit sales will make the iPhone the undisputed $400+ smartphone – worldwide. In this crucial market space (where profits reside) Samsung and Android are toast.

  4. Apple’s advantage is customer satisfaction and loyalty. Apple promotes satisfaction and loyalty by providing unique services. For iPhone, the most effective is the App Store. Apple has the best app “ecosystem,” by far. Once a customer buys an iPhone and builds a library of apps that become indispensable, their next smartphone will be an iPhone. Another key service is Apple Pay; there’s nothing else like Apple Pay. For long-time Apple customers, their iTunes library is an important repository for their media collection. Now, we have Apple Watch; iPhone customers by the tens of millions will become Apple Watch customers in 2015. Their next smartphone will continue to work with Apple Watch. And beyond all that, Apple’s customers are simply “happy” to be Apple’s customers.

    So this question of growth “peaking” is mostly irrelevant. It’s possible that there was a “spike” in iPhone sales with iPhone 6 and 6 Plus, because of “pent up demand” for an iPhone with larger screen. Maybe the December quarter this year will not show the same percentage growth. So what? It doesn’t matter…

    Apple steadily builds a customer base and does not “let go.” Those existing customers will return to buy their next iPhone. And Apple adds a significant number of new customers who are buying an iPhone for the first time. THAT is the formula for consistent growth, and it’s ultra-reliable, because only Apple provides the iPhone experience. Samsung can’t do it, because there is no customer loyalty for Samsung. Android users don’t care if their next smartphone is from Samsung, LG, Moto, etc… or Apple. 🙂

    1. Ken,
      a most lucid dissertation on why iPhone will continue to grow share.

      I see by the “votes” that the Android fans aren’t happy with those prospects. Sour grapes.

      1. There aren’t enough “Android fans” who actually care enough. Almost ALL the down-voting at MDN is done by a trollbot and its socially awkward keeper. Just ONE person.

        You can tell, because certain posts (or posters) are targeted. Today’s mindless task for trollbot is to keep those comments at exactly three stars. How pathetic that it takes some automated system to keep up the appearance that there is a hoard of “Apple-haters.” 😉 Things have hit rock bottom for Android world.

      2. Gregg and Ken, we’ve been part of the same investor groups for more than a decade. We’ve seen all this before, understood it, and done extremely well financially by ignoring the analyst BS. I remember April of about 2005 or so, when we saw AAPL drop on a good financial report for the first time, and we were all dumbfounded and angry. Over the years it’s become expected, especially after the April report. My advice to investors is to simply ignore these spin doctors and continue to buy and hold onto AAPL.

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