Apple’s continuing iPhone strength demolishes bear case

“UBS analyst Steve Milunovich has predicted strong iPhone sales for Apple in the June quarter of 48 million,” Mark Hibben writes for Seeking Alpha. “This will probably be the first of many revisions as the quarter progresses. The unprecedented sales growth of iPhone runs contrary to the bear argument that iPhone sales would wane as soon as the novelty of the big screen iPhones wore off. With new iPhone models just a quarter away, and Apple Watch starting to contribute to revenue, I expect the market to take notice, erasing recent losses.”

“If Apple sells over 50 million iPhones in the quarter, it will mark three straight quarters of iPhone sales over 50 million. With revenue and operating income increasing y/y by over 32%, these are numbers that the market is going to find difficult to ignore,” Hibben writes. “More importantly, the continuing strength of iPhone sales speaks to a fundamental premise of the bears that has to some extent influenced Apple’s share price. This was that the large screens of the iPhone 6 and 6 Plus would have only a transitory beneficial effect. In their eyes, the large screens were simply a gimmick, and come next product cycle, Apple would need another gimmick to prop up sales.”

“Companies such as Microsoft and BlackBerry can only look on Apple’s iPhone success with wonder and envy. Perhaps this is the source of the view that Apple’s success is just a magic act. Those of us who understand the technology know better,” Hibben writes. “The iPhone isn’t just a single product, it’s a host of hardware capabilities, software, and services, backed by massive investments by Apple in processor design, operating systems, servers, and application software. I still get a chuckle when I read comments that ‘Apple is just a hardware company.'”

Read more in the full article – recommended – here.

MacDailyNews Take: In other words: It’s the ecosystem, stupid.

Related articles:
Apple’s iPhone 6/Plus powers Hon Hai to highest first-quarter profit growth in a decade – May 15, 2015
Apple on pace to surpass quarterly iPhone expectations – May 14, 2015
iPhone, killer – May 13, 2015


  1. This is the time for Apple to buy back AAPL as the stock market undervalues it. Apple knows what they have in the pipeline and has a strong belief in its capability. As Apple buys back their own stock, the market will feel the buying pressure and the stock will rise to a price that Apple is not willing to pay to continue buying stock back.

    1. Wow! How can anyone down-vote AAPL stock price moving up? Apple does not lose any money by buying its own stock and likely, it will make more money than having it stuck in municipal bonds or such. Apple needs to start taking itself back and in the process, reward the skittish investors who will sell to Apple. AAPL moves up and we all win.

      1. Maybe someone is thinking of it being taken to the extreme where Apple does like Dell and buys back all their stock making Apple a privately held company.

        1. The market is not valuing the stock properly. Apple is growing much faster than Google or Microsoft, yet Apple is priced much, much lower. The trailing P/E of Google is 25, Microsoft is 20 and Apple is 16. The “experts” justify this by saying Apple’s growth in 2016 is going to suck, but yesterday the CEO of Foxconn said the next iPhone Iteration will sell more than the iPhone 6. Should we believe the guy that makes the devices or some financial prognosticators? Additionally, it is now looking like this current quarter will significantly beat “the experts” estimates, yet again.

          Why should Apple remain public when the street obviously doesn’t give them the benefit of the doubt? If Apple increases the number of shares they repurchase by 15 percent each year they can completely buyback the company within 6 to 7 years.

      2. Some of us believe that profits should be reinvested in:

        1) product updates and improvements
        2) human resources (training and profit sharing)
        3) wise acquisition of manufacturing & technology to improve Apple’s vertical integration
        4) global expansion of Apple Retail stores
        5) stock dividends to reward investors
        50) stock buybacks which are merely games to please Wall Street at the expense of all of the above.

        1. How much has Apple been spending of their cash pile on those things you list so far? How has that ‘profit sharing’ been going so far? Has this ‘profit sharing’ amounted to more than 1.6% per share per year? NO. The stock value is where you make shareholder money.

          Sorry to say Paul but your understanding of Apple is significantly different from the reality of AAPL. Apple can sell bonds if they need more money for those 50? items you ‘list’. They have enough cash to do every one of those items and still manage to grow their cash.

  2. I’ve been pounding this AAPL mantra since 1991. It all started with build quality and software perseverance. The roles have reversed. Windoze 95 was the turning point into the dark ages. “THEY” don’t make a “MAC” version. Karma. Just ask Bill or Steve. Hey Bill! MONKEY BOY! How those developers working out for ya? What? No Apps made for WinDoze 10? Awwww isn’t that too bad. Stick IT Microsloth .!.. Backstabbing Thieves.

    1. One More Thing.

      Microsoft Word & Excel were developed for the Macintosh FIRST.

      How many here remember Microsoft Works running under Multi Finder 6.5 on a Mac Plus SE or Mac II?

      These blathering neophyte ANALholes make me PUKE.

      Long AAPL. 📈

      OH .. How’s that Mikey? What would YOU DO? IDIOT.

      1. yes, i remember running ms works under multi-finder. i remember having to change the event loop in my simulation to account for cooperative multi-tasking too.

  3. “. . . I still get a chuckle when I read comments that ‘Apple is just a hardware company.’”

    I remember when MS was transitioning to “Windows” and a common complaint for MS back then was MS’s penchant for bloating the OS exponentially with each iteration instead of making it efficient. This is what is dogging MS to this day.

    What I am seeing with Apple in the iPads and iPhones is a trend towards efficiency in the OS as it trims down the hardware in size. Sure, the memory and storage size is shrinking in physical size while increasing in capacity. But Apple seems to be combining a good balance between the shrinking size, increased computation ability and OS efficiency.

    MS is being hampered by decades long OS bloating and ignoring the increased mobility movement. It IS about the OS, and Apple is on the right track. Apple IS a software company too.

  4. It won’t matter. Wall Street will still punish Apple for how ever long they plan on it. Tim just needs to do what Steve did, ignore Wall Street.
    Look at everything Tim has done to placate them, what has it done for the stock? Nothing.
    They are all leaches and criminals. There will never be optimism for Apple. For whatever reason, Wall Street hates Apple and will never give them a break.

  5. Apple Bear Bullshit never was anything more than bullshit. √ Proven.

    I still get a chuckle when I read comments that ‘Apple is just a hardware company.’

    TechTardiness remains rampant among the ‘tech journalists’. Blind leading the blind. That explains one big reason of AAPL price fluctuation lunacy. “WOLF!” and all the sheeple run for it.

  6. Weak companies attempting to prop up their stock price have traditionally repurchased their stock so this is why I am suspicious of any company, including Apple, that buys back its stock. As a precedent for Apple, I think it bodes no good.

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