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

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

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16 Comments

1. WeezyF

Posts: 155; Member since: Jul 09, 2015

Lets see how it plays out in the next 12 months

8. vincelongman

Posts: 5591; Member since: Feb 10, 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

12. WeezyF

Posts: 155; Member since: Jul 09, 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.

2. hado86

Posts: 177; Member since: Oct 15, 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.

3. darkkjedii

Posts: 30719; Member since: Feb 05, 2011

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

4. French_Toast

Posts: 98; Member since: Sep 02, 2015

Look more a low end phone for expensive price.

5. darkkjedii

Posts: 30719; Member since: Feb 05, 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.

9. French_Toast

Posts: 98; Member since: Sep 02, 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.

7. xocomaox

Posts: 195; Member since: Dec 14, 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.

14. Nopers unregistered

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

16. ibend

Posts: 6747; Member since: Sep 30, 2014

nope, antutu is unfair since v 6.x realeased

6. Youraveragejoe

Posts: 134; Member since: Oct 31, 2014

It should be launched at $200

10. bur60

Posts: 981; Member since: Jul 07, 2014

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

11. Micah007

Posts: 266; Member since: Oct 09, 2014

Pass....

13. Hashed unregistered

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

15. tedkord

Posts: 17051; Member since: Jun 17, 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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