Apple's shares rally again as analysts weigh in on the new iPhone 7 and iPhone 7 Plus
Apple's shares hit a nine month high on Monday, closing at $111.77. The gain of 3.54% takes Apple well off the low of $91.50 it hit on June 27th. The stock dropped under $100 back in April after reporting its fiscal Q2 earnings. In that three-month period, Apple sold fewer iPhone units in a quarter on a year-over-year basis for the first time in history. That happened again during the July quarter, but that time the shares gapped open at $102 and have been rising ever since.
BTIG analyst Walter Piecyk says that strong iPhone pre-orders reported by AT&T, Sprint and T-Mobile are the first indication that Apple will surprise the Street by pulling off strong growth in the December quarter. Part of the reason for the unexpected growth is the larger pool of potential iPhone buyers. According to Bernstein analyst Toni Sacconaghi, the number of iPhone users is about 50% higher than it was a couple of years ago. That means that there is a large number of iPhone owners who would be interested in upgrading to the new models.
"Not too long ago, people were afraid that the iPhone had had its best days, and it was going to be a decliner in perpetuity going forward. Now people seem to be pretty comfortable that you can be flat, to maybe a little bit of growth this year, and ... heading into the ten year anniversary next year, that should be a more meaningful upgrade cycle for them."-Ben Schachter, senior analyst, Macquarie Group
"For a company where the concern was hey, this phone is not that different from the past two and it maybe wasn't going to excite people, following quarters where the upgrade cycles were down … this is the first true fundamental data point that might be indicative that the company can actually return to growth in the December quarter."-Walter Piecyk, analyst, BTIG
"For a company where the concern was hey, this phone is not that different from the past two and it maybe wasn't going to excite people, following quarters where the upgrade cycles were down … this is the first true fundamental data point that might be indicative that the company can actually return to growth in the December quarter."-Walter Piecyk, analyst, BTIG
Sacconaghi said that figuring out how many current iPhone owners will upgrade is the key to forecasting how well Apple will do with the new handsets. Five years ago, only a quarter of iPhone sales came from upgrades. Now, 80% of iPhone sales come from upgrades. And making things harder is Apple's decision not to release pre-order figures. The tech titan says that pre-order figures are not indicative of anything since the iPhone 7 and iPhone 7 Plus will have its initial sales determined by supply, not demand,
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