“When Apple released iPhone 6 in 2014 it went to become the most popular smartphone in history selling over 220 million devices,” Sean Chandler writes for Seeking Alpha. “There is a big chunk of the hundreds of millions of customers that purchased iPhone 6, 6+, 6S, and 6S+ looking for a reason to upgrade; myself included. When this happens, and I suspect that it will following Apple’s 2018 iPhone, sales will surge.”
“A few years ago Tim Cook predicted that its services business would soon be as valuable as a Fortune 100 company. In 2017, Services revenue was $30B and this year is on track to top $37B. This would put this business somewhere around number 250 on the Fortune 500 list. It’s important to note that this is high-margin revenue with a gross margin of somewhere around 60%,” Chandler writes. “Over the last two years, Services revenue has been up about 18-25% year-over-year but in the last two quarters this growth has accelerated to over 31%. If Apple tops $37B in services revenue for 2018 and continues to grow it as 23% each year, the revenue for this department will be the same size as the Walt Disney Compan in 2020.”
“Not only did Apple become the world’s first publicly traded trillion-dollar company, it did so without relying on an inflated, growth-based valuation,” Chandler writes. “Apple is still growing its revenue and profit and does so with an impressive gross margin of almost 40%. There is still room for Apple to grow and remain profitable and with a price-to-earnings ratio of 19, Apple is a fair purchase worth adding to any portfolio.”
Read more in the full article here.
MacDailyNews Take: And, well beyond two years, too.