Analyst worries about Apple’s ability to top stellar success of iPhone 6/Plus

“As Apple Inc. prepares to introduce its latest iPhones next week, the company’s biggest challenge is one of its making: how to top its own success,” Daisuke Wakabayashi reports for The Wall Street Journal. “Apple’s bigger-screen iPhone 6 and iPhone 6 Plus, introduced a year ago, reignited sales growth for Apple’s smartphone, propelled the company to record profits and solidified Apple’s standing in China. Apple has been gaining share versus rivals, despite its more expensive offerings. IPhone unit sales grew more than 30% in each of the past three quarters, compared with a year earlier.”

“Now, comes the hard part. Such growth rates are ‘mathematically unsustainable,’ said Toni Sacconaghi, an analyst with Bernstein Research. He forecasts iPhone sales to grow 3% to 237.6 million units in the fiscal year starting October,” Wakabayashi reports. “‘It’s highly debatable whether there will be any iPhone growth next year,’ said Mr. Sacconaghi. ‘The market realities will catch up with Apple.'”

MacDailyNews Take: If “it’s highly debatable whether there will be any iPhone growth next year,” Toni, then why are you forecasting 3% iPhone sales growth? Ladies and gentlemen: Wall Street “logic.”

“One reason: The changes in the newest iPhones won’t be as dramatic as last year, when Apple offered larger-screen models for the first time. Apple is expected to unveil the new phones at an event Sept. 9 in San Francisco,” Wakabayashi reports. “The results of the past year set a high bar. iPhone revenue grew at its fastest rate in two years, at a time when the rest of the smartphone market was starting to slow.”

Read more in the full article here.

MacDailyNews Take: No worries.

iPhone “S” years usher in hugely significant features, such as oleophobic displays, significant GPU improvements, world phone capability, Siri personal assistant, video stabilization, panorama photos, 64-bit processors, TD-LTE support, and Touch ID, among other improvements and additions.

This year will be about cameras, 7000 series aluminum, and Force Touch (or whatever they decide to call it going forward) and it will be more important than people like Toni Sacconaghi think. (Hey, Toni, did you ever find your “missing” iPhones?) As with every new iPhone before them, Apple’s next-gen iPhones will become the best-selling iPhones yet.

SEE ALSO:
Revealed: How Force Touch works and feels in Apple’s next-gen iPhone 6s – August 10, 2015
Apple’s Force Touch: The future of mobile interfaces – August 4, 2015
Why Force Touch on the iPhone will be awesome – July 29, 2015
Apple’s Force Touch iPhone 6s to be major differentiator, put rivals at further disadvantage – July 6, 2015
Apple assemblers begin making next-gen iPhones with Force Touch – June 27, 2015
Analyst: Apple’s ‘iPhone 6s’ to feature stronger 7000 series aluminum, slightly thicker for Force Touch – June 17, 2015
Apple’s new Force Touch patent application reveals stylus, virtual paint brush, 3D buttons interactions – May 28, 2015
Apple’s forthcoming iOS 9 supports ‘iPhone 6s’ Force Touch – May 26, 2015
Apple patent application reveals work on Force Touch for iOS devices and more – March 5, 2015
Force Touch rumored to arrive exclusively on ‘iPhone 6s Plus’ – April 2, 2015
Apple’s next-gen iPhone 6s, iPhone 6s Plus to feature Force Touch – February 28, 2015


19 Comments

  1. If the record-shattering sales year of iPhone 6 and iPhone 6 Plus was so great, how is “only” 3% higher considered a bad thing? It’s repeating greatness, plus another 3%.

    This is a variation of the “Apple is doomed because iPhone sales are down in sequential quarters” theme. Because Apple had a particularly good year in iPhone sale, and “growth percentage” is lower the next year, Apple is obviously doomed… 🙂

    Analysts – It’s our job to paint Apple’s current good news as future bad news.

    1. ” ‘Such growth rates are ‘mathematically unsustainable,’ said Toni Sacconaghi, an analyst with Bernstein ReseArch said.”

      There are 2 ways to grow unit sales. The first is to benefit from industry growth. Using that measure Sacconaghi is correct as industry is expected to be about 3% during 2016. The other way to grow is to take sales away from competitors. Kangaroos Comtech states 27% of Android users switched to iPhone in the 3 months ending August (Europe market).

      When you add industry growth with reported switcher rate (consistent since iPhone 6 launch) to feature phone to smart phone upgrades (about 15%), and apply that to calendar 2014 sales (2 year upgrade cycle regardless of how purchase was financed) you end up with YoY unit growth rate of about 20%.

      Evidence of the shift from Android to iPhone is being published almost weekly via dismal sales numbers of Samsung’s Galaxy 6/Edge.

      Obviously Sacconaghi is not taking into account the switcher rate from Android to iPhone or the feature phone to smart phone upgrade rate in his iPhone sales estimates.

  2. Let’s see, Apple already generates >90% of all cell phones profits and they are going to have a 3% increase in iPhone growth?
    Hmm, that sounds about right when you actually think about it.

  3. I suppose investors are only concerned with large growth because that’s the only way they can count on a company’s stock price going up a lot. They’re greedy and don’t seem to be interested in small gains, so they just jump from one stock to another trying to find large gains. These investors don’t seem to have any interest in the companies at all. The company is simply used as a vehicle to make money. That’s not much investing at all if they’re only going to put money in one quarter and take it out the next quarter.

    I thought this year investors were disappointed in iPhone sales, so it’s not going to get any better next year for loyal Apple shareholders.

  4. All he has to do is look at the upgrade figures..
    Only 27% have upgraded.
    There is another 73% that have not…
    Thats a lot if iphones.
    Add on top new buyes and migrants from android “”

  5. “Unsustainable growth.” The problem with fidgeting about this is that growth is a function of several variables, which are invariably taken as static by unimaginative observers who fancy themselves mathematical analysts. In fact, they are relying almost exclusively on gut feelings or, at best, measurements that are little better than tea leaf readings.

    An instance of this farcical situation is that one year ago the identical argument was made and it FAILED. Thus, this year the analyst’s gut insists on an increased probability that growth has peaked—based on the fake axiom that it simply has to happen; and the analyst’s tea leaves suggest a slump due to market saturation, to aggressive competition, to dearth of innovation, to China going cold, or to production yields declining.

    The analysts should stop snorting the tea leaves, and start investing in AAPL. And get into another line of work.

  6. Certain analysts have been claiming for several years that we were already at peak iPhone sales levels and despite that, sales kept on increasing at rates that they didn’t believe were possible.

    Why does anybody still listen to analysts when their previous predictions have been so utterly wrong?

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