Apple Inc (AAPL) predicted that the introduction of iPhone 12 smartphones with 5G would improve purchases by owners of older iPhone models and launch a wave of updates. Based on a Wedbush analyst’s study of the supply chain, the actual figures could surpass optimism.
After two years of downturn, iPhone shipments by Apple (AAPL) in 2021 may return to a growth trajectory, primarily thanks to the 5G enabled iPhone 12 launched in October, Wedbush analyst Daniel Ives believes.
The analyst believes that Apple will make at least 90 million iPhones in the holiday quarter of December, based on the current supply chain report by iPhone suppliers in Asia (Fiscal 2021 Q1). That’s better than the ambitious estimate of 80 million iPhones and average Wall Street analyst estimates by Ives in mid-December.
Earlier, the Nikkei Asia publishing house posted on Apple’s plans to manufacture around 230 million iPhones in 2021, citing unnamed sources.
Wedbush’s estimate for the second quarter of iPhone shipments is 60-70 million, from 40 million and above in the last quarter.
In the reporting period, heavy demand for Air Pods wireless headphones over the holidays will also weigh on Apple’s total sales and profits. Wearable segment revenue, which includes Apple Watch and Air Pods sales, rose by 25 percent to $30.6 billion in 2020 (compared to the amount of last year) and accounted for 11.2 percent of Apple’s overall revenue, up from 9.4 percent a year ago.
Moreover, the increase in the number of registered iPhones is growing the device base for Apple services revenue. Apple creates a stable and ever-growing revenue stream for the services division, which hit almost a quarter of the company’s overall revenue in 2020, up from 17.8 percent last year.
As a result, according to the analyst, iPhone revenue growth could be “a big plus for the stock in the coming months,” and iPhone 12 sales will be able to replicate the iPhone 6’s popularity in 2014.
Ives affirmed his “Outperform” recommendation (worse than “Buy” but better than “Hold”) with a target price of $160 for Apple shares (the highest among analysts).
Apple Inc (AAPL) shares were up 80.75 percent for 2020, ending at $132.7 on Thursday, but have traded at a loss of -2.47% on Monday to begin the year at a level of $129.41.