updated 08:33 pm EDT, Wed July 2, 2014
More carriers, more countries to carry iPhone sales in June, leading to new models for holidays
At least some Wall Street analysts believe that Apple may have found a way to do well in the traditionally-slower summer months leading up the reveal of the next iPhone, expected sometime this fall. Maynard Um of Wells Fargo believes that Apple may be in a position to set an all-time record for June quarterly sales in its next report , predicting the company has sold some 36.5 million smartphones by opening up new markets. Meanwhile, Evercore Partners analyst Rob Cihra looks to a spectacular holiday season.
Um believes Apple will surpass the consensus revenue predictions for the June quarter, which averages $37.9 billion -- just a shade below the top end of Apple's own guidance. He says the company may have made $38.2 billion in revenue, on the back of the 36.5 million iPhones Um thinks Apple sold. This would be a huge gain on the previous record, 2013's 31.2 million units sold in the June quarter.
He points to the company adding four new, but small, markets to the list of countries with the latest models -- Brunei, Kosovo, Kazakhstan and Lebanon -- and 16 new carriers to help bolster sales. Not only will the latest models benefit, but the expansion also opens up choices for the budget buyer -- with lower-cost 8GB iPhone 5c units and the continuing availability of the iPhone 4S.
The latter has proven to be a surprise hit in developing markets due to its inclusion of Siri, and ability to run the forthcoming iOS 8. Estimates on last quarter's record iPhone sales noted that the iPhone 4S may have accounted for as much as 25 percent of total iPhone sales. The total number of carriers now sporting the iPhone among its choices has risen to a total of 332.
Um also estimates Apple sold 12 million iPads, 3.9 million Macs and two million iPods in the June quarter, with gross margins of 38.3 percent and an EPS of $1.27, both of which are slightly higher than the consensus estimates. However, Um is more bullish on the long-term prospects, keeping his "market perform" rating, with an estimated share value of between $86 and $96 per share. AAPL closed on Wednesday at $93.48, a drop of four cents from Tuesday's close.
Evercore Partners' Rob Cihra, on the other hand, take nearly the opposite view. He has set a year-end price target for AAPL of $115, one of the highest estimates available. In part this is based on his estimate of 58 million iPhones sold in the holiday quarter, which would be an increase of 14 percent from 2013 if true. Cihra says there is a great deal of pent-up demand for a larger-screen iPhone, which he believes the company will unveil with the "iPhone 6" this fall.
If the stock went past $110, it would surpass (on a share-adjusted basis) its all-time high. Cihra believes Apple will achieve that by "creating its own growth through uniquely innovative hardware and software with integrated services versus a sea of otherwise commodity devices," he told investors. He is also counting on Apple bringing out the rumored "iWatch" device which he "conservatively" sees as selling 18 million units within its first year. Some $5 million worth would be sold in the December quarter at a retail price of $249, he predicts.
Cihra is somewhat more conservative, but still optimistic, about Apple's June quarter as well. He thinks the company will sell around 36 million iPhone units -- less than Um, but still a 12 percent growth rate over the year-ago quarter. If correct, that would put Apple ahead of Samsung, which is estimating just six percent smartphone growth this year, AppleInsider notes. Several other analysts, including Charlie Wolf at Needham & Company, analysts from Cowen & Company, RBC Capital Markets and J.P. Morgan have all recently raised their AAPL price targets, ranging between $97 and $108 per share.