Citi Speculates, 'Can Apple Grow iPhone Units Again?'

Citi’s Jim Suva maintained a Buy rating on Apple Inc. AAPL, with a price target of $130.

Will iPhone Units Grow?

“Given March quarter iPhone unit expectations for a negative -15 percent year-over-year decline (following +37 percent iPhone unit growth in FY2015), investor attention remains focused on whether Apple can grow iPhone units again,” Suva mentioned.

The analyst believes that the company would be able to grow its iPhone units in the September quarter, driven by the launch of iPhone 7, along with further expansion into the emerging markets.

Suva expressed concern regarding the pricing of the iPhones, saying that Apple dominates the higher ASP section in smartphones, which leads investors to focus on factors such as end demand, replacement cycle and market saturation.

Related Link: Apple May Be Giving More Cloud Business To Google, Less To Amazon

Apple in India

Suva expects Apple to announce the launch of the iPhone 5SE on March 21, “which will likely be accompanied by a reduction in price of its iPhone 5S (US$300), both of which will appeal to India, China, and other emerging markets.”

The company currently holds 2 percent share of the Indian market for CY2015, and the analyst expects Apple to increase its market share to the same level as that in China, which in turn would drive iPhone units up by 15-20 million.