“Apple’s shares have faced pressure as a variety of reports and, more important[ly], a couple of the firm’s component suppliers have suggested that inventory corrections are taking place as iPhone 6s and 6s Plus sales are not living up to the company’s estimates,” Brian Colello writes for Morningstar.
“A clear takeaway, in our view, is that strong quarterly revenue beats for the December and March quarters, which Apple has routinely generated, are probably off the table with the 6s launch,” Colello writes. “Yet we still see a scenario where iPhone unit sales are able to meet our estimates despite grim production cuts, depending on how overly optimistic Apple may have been when building for its 6s launch.”
“We still project that iPhone unit sales will be in the high-70 million range for the December quarter, which would represent modest growth from the year-ago quarter,” Colello writes. “However, iPhone unit sales for the March quarter, which would rely on Chinese New Year spending, look shakier and may in fact decline year over year (we currently model slight growth).”
“We consider Apple’s competitive position in mobile computing to be as strong as ever, yet shares around $100 are priced as if the iPhone will never grow again, which we think is possible but unlikely as we see the iOS ecosystem creating customer stickiness,” Colello writes. “We are maintaining our $140 fair value estimate for Apple and consider it one of the better investment ideas in technology.”
Read more in the full article here.
MacDailyNews Take: It’s “unlikely” that the iPhone will never grow again? Way to bravely and concisely make the clear call, Brian! “Probably.” “Possible.” “May.” “March quarter sales ‘may’ decline,’ [but] we currently model slight growth.” Gee, Brian, do you want some more bases to cover? Are you analyzing a company or running for office?
Enough with the wishy-washy, all-things-to-all-people nonsense: iPhone sales will certainly continue to grow. Anybody who suggests differently has no idea what they’re talking about.
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