Neil Hughes
With a huge number of iPhone owners yet to upgrade to screen sizes larger than 4 inches, Evercore Partners expects major revenue growth for Apple in fiscal 2015 and beyond, and has increased its price target on the company's shares to $135.
Analyst Rob Cihra issued a note to investors this week, a copy of which was provided to AppleInsider, announcing his revised target, up from a previous prediction of $125. Apple's fiscal 2015 begins with the current December quarter, in which Cihra has predicted Apple will sell 65 million iPhone units.
But for him, even more impressive than the 27 percent year over year unit growth that Cihra expects is a prediction that the average selling price of the iPhone will increase by more than $20. This stands in contrast to the broader smartphone market, which is only seeing growth at the low end.
Cihra and many others expect that the iPhone 6 and iPhone 6 Plus will increase the average selling price of the iPhone thanks to the $100 premium for the 5.5-inch model, as well as the elimination of the 32-gigabyte storage capacity, offering instead 64 and 128 gigabytes on higher end models and incentivizing storage increases for new buyers.
The analyst's predictions call for 43 percent of the iPhone install base to still be using screen sizes of 4 inches or less by the end of fiscal 2015, which runs through the end of September of next year. With an extremely loyal user base, Cihra believes that almost all customers will eventually upgrade, which bodes well for Apple's growth beyond 2015.
And while Apple's revenue was up 7 percent year over year in fiscal 2014, Cihra believes revenue growth will reaccelerate in fiscal 2015, growing 15 percent year over year.
Of that growth, he believes about 90 percent will be driven by the iPhone. But he also has high hopes for a rumored new, larger "iPad Pro," as well as the upcoming Apple Watch set to launch in early 2015.
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8 Comments
Further evidence that Apple is doomed (sarcasm)
Woot! My cost basis is $18.57, split adjusted. Glad I was stubborn and hung in there during the past few (lean) years while Tim Cook was getting his legs under him.
AAPL has a long way to go yet. I think many are underestimating ?Watch sales potential as well as its spin off technologies we have yet to see. IBM and Swift just starting in Corporate, plus with and ?Pay and I really hope ?Search next year too ... and who knows what else, all while the opposition crumble. GO APPLE!
How long before the competition becomes so desperate they begin invoking anti-trust?
Yeah, well, the institutional investors don't seem to think Apple is going anywhere and that's why they've been loading up on Microsoft, Cisco, Google, Hewlett-Packard and Pandora. They're even pouring money back into Amazon like nothing ever happened last quarter, so Apple is low priority to the institutional investors. I have yet to figure out what they don't like about Apple as a company. I've heard things like they don't want to put money into some low-growth company that can only make phones for survival. I don't understand the mentality of pension funds because I'm not sure why they stick with companies that are nearly profitless. Xerox has 84% institutional ownership, but seriously, I have not seen one metric that Xerox has that is superior to Apple. I must be missing something. Over the past ten years Apple is up 1400% while Xerox is down 13% over the same period. So how exactly how does owning Xerox help a pension fund? In no way I can see.