Analyst predicts huge growth as Apple orders 75m+ 5G iPhones
Canaccord Genuity technology analyst Michael Walkley has raised his sales and earnings estimates for Apple for 2021 and 2022, even as we learn the company has inked initial production deals for 75+ million units of its soon-to-be-announced iPhones.
(Compare that with iPhone 9.)
Apple’s strength is evidenced
“Despite challenging global economic conditions due to COVID-19, Apple is demonstrating the strength of its products and ecosystem as evidenced by its strong Q3/F20 results with a return to year-over-year growth for iPhones and strong double- digit growth for Macs and iPads due to the increased remote working and learning,” the analyst writes in a note to clients shared today.
The analysis doesn’t skip that Apple’s iPhones will hit market later than usual in 2020, as the company grapples with a boat full of unpredicted challenges.
“We anticipate continued double-digit growth for all hardware products except iPhones during Q4/F20 and this is due to new iPhones slightly delayed and facing a difficult growth comparable,” the analyst said.
That’s going to change, though, Walkley argues:
“Starting in Q1/F21, we believe Apple is well-positioned to benefit from the 5G upgrade cycle and anticipate strong iPhone growth to contribute to overall strong growth trends as 5G smartphones ramp and Apple continues to grow its installed base and higher-margins services revenue.
With the 5G upgrade cycle driving iPhone sales, other hardware categories growing double digits, and continued business mix shift towards high-margin services, we reiterate our BUY rating and increase our price target to $145 based on our introduced C2022 estimates,” he wrote.
The report reveals the opinion that Apple may shift as many as 400 million 5G iPhones across the next two years, even as the ecosystem and services required to serve up 5G propagate worldwide.
Apple is ‘outperforming competitors’
Apple’s customer loyalty is also driving future success:
“Apple is outperforming its competitors across all hardware categories and the strong ecosystem is leading to a very loyal customer base buying more hardware products and using more services,” he wrote.
Who’d have thought that keeping customers satisfied was such a great business in this cynical age or exploitative, amoral capitalism?
Meanwhile, Apple plans four models of iPhone with 5G and a variety of prices and screen sizes.