“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.
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