Apple's iPhone 6 May Be Poised For Record-Breaking Q4 Results
Most investors will be looking to the iPhone 6 when Apple Inc. (NASDAQ: AAPL) reports earnings after Monday's close. The new handset sold 10 million units in one weekend -- more than any other smartphone, including other iPhones.
Did the record-breaking sales continue in the weeks that followed?
"That depends on how much they have filled the channel with the new iPhone 6," ABG Sundal Collier analyst Per Lindberg told Benzinga. "Clearly if they sold a lot into the channel in September, then they will have more headwind into the December quarter."
A New Record Guaranteed?
Apple's Q4 results tend to be very good:
- Q4 2010: 14.1 million iPhones
- Q4 2011: 17.07 million iPhones
- Q4 2012: 26.9 million iPhones
- Q4 2013: 33.8 million iPhones
Given that Apple has already reported record-breaking iPhone 6 sales, it seems likely that the company will set a new record this quarter as well.
Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, estimates that Apple sold 38.7 million iPhones this quarter. He expects Mac sales to increase roughly 13 percent to 5.2 million units. iPad sales could endure a 9-percent decline, falling to 12.8 million units.
Tech industry expert and analyst Jeff Kagan did not have any specific sales estimates, but he expects Apple to thrive this quarter.
"I think the iPhone, as every previous iPhone has done, blows it out of the water," Kagan told Benzinga. "Apple is not a conventional company. Apple doesn't follow conventional rules. They're successful year after year because they have a relationship with their customer base that is unique. Customers love them. It's a cult. And they keep building on that cult."
Between 2011 and 2014, Apple added Siri (iPhone 4S), Maps (iPhone 5), Touch ID (iPhone 5S) and Apple Pay (iPhone 6). The company also adjusted the size of its flagship product, extending the iPhone 5 by half an inch before releasing the 4.7-inch and 5.5-inch iPhone 6 models.
Now that the long-awaited large format iPhones have been released, how might Apple enhance the next generation?
"If the promise of unbreakable glass comes, that would be another evolution that would actually be very good," Udall told Benzinga. "That doesn't really improve the usability of the device, but it improves the consumer satisfaction."
Beyond that, Udall isn't sure there will be many changes in the smartphone space.
"[If you] expect changes in this market now, you might be a little disappointed," Udall told Benzinga. "Once the PC got to a certain point, it didn't really evolve that much anymore. It just got better and faster with each iteration. I think we're kind of at that place with phones."
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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