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UBS analyst Milunovich: Apple could net $1.5 billion in iPhone 5se's first 12 months

Posted: , by Alan F.

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UBS analyst Milunovich: Apple could net $1.5 billion in iPhone 5se's first 12 months
With talk that Apple will introduce the long rumored 4-inch Apple iPhone 5se on March 15th and launch the device three days later, there is a question that most Wall Street analysts need to compute: How much money will come into Apple's coffers thanks to the new phone? UBS analyst Steve Milunovich has been covering Apple back before it became known as a smartphone manufacturer, and he has put together an analysis of what the new iPhone model means to Apple in dollars and cents. 

Milunovich sees the iPhone 5se selling 30 million units during its first 12-months on the market. This would be about two-thirds of the number of Apple iPhone 5s and Apple iPhone 5c units he estimates were sold in fiscal 2015. Priced at $500, he expects the new phone to cannibalize 5 million Apple iPhone 6 sales which would wipe out $3 billion in revenue. This would allow the iPhone 5se to generate a net $7.8 billion in revenue for Apple. Figuring a 25% operating margin on the device (the entire company had a 30.5% operating margin in fiscal 2015), Apple would receive $1.95 billion in operating earnings.

At a 25% tax rate, that would leave $1.5 billion in net income for Apple to add to its bottom line. That works out to an additional 26 cents per share for the company. This is all just an estimate from a Wall Street analyst of course, and it doesn't count the additional benefits to Apple such as more Apple Pay-driven revenue (the iPhone 5se is rumored to support the mobile payment service), accessory sales and app sales.

For Apple, releasing a new 4-inch iPhone is a good way to get those not comfortable with a larger 4.7-inch display, to upgrade their handset. Will it work out like Milunovich predicts? We will find out 13 months from now. Stay tuned.

source: Forbes

16 Comments
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posted on 14 Feb 2016, 10:53

1. WeezyF (Posts: 129; Member since: 09 Jul 2015)


Lets see how it plays out in the next 12 months

posted on 14 Feb 2016, 12:10

8. vincelongman (Posts: 3976; Member since: 10 Feb 2013)


I wonder if this will outsell the iPhone 7

I reckon it will because of the lower price and that Apple haven't released a 4" over 2 years

posted on 14 Feb 2016, 13:00

12. WeezyF (Posts: 129; Member since: 09 Jul 2015)


It is a possibility but i highly doubt it. Due to the price people in developing countries will go for other options. It might sell well in america and europe but in other places i doubt it.

posted on 14 Feb 2016, 10:59

2. hado86 (Posts: 69; Member since: 15 Oct 2014)


This will sell like hot cakes! Personally I'm looking forward to the air 3 being every bit as good as the pro if not better.

posted on 14 Feb 2016, 11:19

3. darkkjedii (Posts: 19456; Member since: 05 Feb 2011)


I'm curious about the little beast, but the Air 3 even more.

posted on 14 Feb 2016, 11:26 4

4. French_Toast (Posts: 69; Member since: 02 Sep 2015)


Look more a low end phone for expensive price.

posted on 14 Feb 2016, 11:28 6

5. darkkjedii (Posts: 19456; Member since: 05 Feb 2011)


All you needn't do, is buy one. Trust me, no one that's interested in this device cares about your whiny trolling opinion.

posted on 14 Feb 2016, 12:11 4

9. French_Toast (Posts: 69; Member since: 02 Sep 2015)


Sorry my friend but tell the truth about the Apple product is not trolling.

If this phone was not the bottom line, Apple would call the mini iphone 6 not the 5se.

posted on 14 Feb 2016, 11:35 1

7. xocomaox (Posts: 112; Member since: 14 Dec 2015)


It may keep good specs and just offer a smaller, lower resolution screen. If so, Antutu benchmarks would be through the roof considering a small amount of pixels to push. But I have a feeling the will downgrade it some, considering Apple tends to keep their profit margins quite higher than other manufacturers. If the $500 price tag is to be believed.

posted on 14 Feb 2016, 17:25

14. Nopers (Posts: 104; Member since: 01 Jun 2015)


Antutu uses off screen rendering I think, everyone gets 1080p so it's more fair.

posted on 14 Feb 2016, 18:43

16. ibend (Posts: 3182; Member since: 30 Sep 2014)


nope, antutu is unfair since v 6.x realeased

posted on 14 Feb 2016, 11:33 3

6. Youraveragejoe (Posts: 117; Member since: 31 Oct 2014)


It should be launched at $200

posted on 14 Feb 2016, 12:34 2

10. bur60 (Posts: 821; Member since: 07 Jul 2014)


Wouldn't be Apple if financial rape wasn't playing it's part

posted on 14 Feb 2016, 12:39

11. Micah007 (Posts: 254; Member since: 09 Oct 2014)


Pass....

posted on 14 Feb 2016, 13:21

13. Hashed (Posts: 45; Member since: 11 Dec 2015)


Give the iPhone 5se the IPhone 6s' hardware, a very good battery life, the nice looks of the 5s, and I'll be trying my first iPhone

posted on 14 Feb 2016, 18:10

15. tedkord (Posts: 9897; Member since: 17 Jun 2009)


I just couldn't go back to a 4 inch phone. Or even 5 inches at this point. Couldn't go much bigger than the Note 5, either.

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