iPhone remains key driver

Apple did extremely well in its fiscal fourth quarter, say analysts with Needham and UBS. Needham's Charlie Wolf describes 7.4 million in iPhone shipments as "especially impressive," given that the device still has a fairly new install base. Wolf estimates that approximately 5.5 million of the units are fresh activations, rather than upgrades.

Also said to be impressive is a 17 percent growth in Mac units, led by a 35 percent rise in notebook sales. Aside from surpassing the "anemic" growth of the rest of the computer market, the figure is believed to be a sign that Mac sales continue to be fueled by the iPhone and iPod halo effect. Substantial price cuts are not needed to keep Mac sales going, Wolf claims.

Maynard Um of UBS remarks that he expects recurring iPhone revenues, based on an expanding install base, the pull of the App Store, and new carrier partners. He further proposes that the company may eventually provide a service with seamless access to digital content across all of its products.

Um calls for $12.5 billion in revenue for the December quarter, with at least 9.8 million in iPhone shipments. In the long-term he is raising his price target from $265 to $280, and his FY10 GAAP/pro forma EPS estimates from $7.70/$11.09 to $7.84/$11.68. FY11 figures are being shifted from $8.89/$11.64 to $9.18/$12.03. Wolf is holding to a $235 price target, but raising his 2011 GAAP EPS prediction from $6.70 to $7.30.

by MacNN Staff