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  • Writer's pictureGVA Research

GVA Research on CNBC’s Nightly Business Report: What Lies Ahead For Apple?

Updated: Apr 23, 2021

I’m forecasting Sept 2015 quarter above the Street with revenues of $52.5bn (+24.6%) and EPS of $1.95 (+37.3%) reflecting the benefit to AAPL of launching the iPhone6S in China. Note that last year’s iPhone6 launch didn’t include China.

Investors will be waiting with great anticipation to hear how sales of the iPhone 6s and 6s Plus are faring – if these numbers are great what does it mean for the future iPhone sales? Will we continue to see growth in iPhone sales?

Given investor concerns over the consumer strength in China, there have been fears that AAPL results would fall short. We draw investor attention to BABA’s solid 3Q15 results as indicating that investor concerns have become overblown. We look for AAPL Sept 2015 iPhone shipments to top 50mm with guidance for Dec 2015 iPhone shipment guidance to be in the 75-80mm range.

Investors will also be looking for updates on several of Apple’s other products this quarter that have recently been launched or are in the process of being launched. These products are likely going to help Apple reduce its reliance on its iPhone segment which currently dictates around 70% of revenues like the Apple Watch, Apple Pay, Apple Music & Apple TV – how significant are these areas for the future of Apple?

Apple TV may begin to have some effect in the Dec 2015 quarter as the new version was recently launched at higher price point than its predecessor. Meanwhile, the Apple Watch is experiencing a slow build that may be accelerated by the year-end holiday season. Apple Music and Apple Pay are nice to have services that primarily serve to enhance consumer engagement, but not necessarily drive substantial revenue.

Much of the company’s success this year can be attributed to China, do you think the massive growth in that region continue given the issues that are ongoing in China? Where will future growth come from?

China represents more than 20% of AAPL revenues and is arguably the company’s greatest growth driver. While China economic growth goals are likely to drop from 7% to 5% annually, it still leaves an economy that will likely experience growing long-term demand for AAPL products.

How are you advising investors on the stock?

AAPL shares may not enjoy the meteoric gains it has in past years, but is a solid long-term holding. We expect share appreciation to the $150 level over the next 12 months with continued dividend growth.

#appl #AAPL3q15 #applewatch #APPLresults #iphone6s

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