“The smartphone refresh cycle has maintained its course due to the rapid depreciation of mobile components and the ongoing commitment to two-year mobile contracts,” Alex Cho writes for Seeking Alpha. “Sure, some have opted out of two-year contracts, but the vast majority of smartphone plans are sold on a two-year contract.”
“Therefore, a refresh every two-years seems more or less intact,” Cho writes. “What gained Apple mobile subscribers was emerging market growth, and market share additions. The move to high-end devices has crippled demand for commodity phones, and as such, Apple is positioned for success despite the looming skepticism of the bears.”
“I anticipate growth in units at around 21% year over year due to continuous growth of the entire installed base inclusive of upgrades from iPhone 5 and 5s users,” Cho writes. “If the last cycle was all about the bigger screen real estate, the next cycle will be driven by performance and higher base storage. That’s not much to work with, but when you’re dealing with users who are transitioning away from low-end Android devices just about any high-end phone looks like a Maserati in comparison.”
Cho writes, “Assuming Apple is able to generate 20% revenue growth in the next fiscal year, the stock is a freaking bargain at these levels.”
Read more in the full article here.
MacDailyNews Take: Again, only some 27% of iPhone users have thus far upgraded to iPhone 6/Plus. Not counting Android to iPhone upgraders, an enlightened group of former sufferers that growing at a record rate.
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