Find out why Wall Street analysts are screaming that the Apple iPhone is back

Find out why Wall Street analysts are screaming that the Apple iPhone is back
Yesterday afternoon Apple released a very solid fiscal first-quarter earnings report. For the three months from October through December (also known as the holiday shopping season), Apple sold nearly $56 billion worth of iPhone units. That was 8% above the iPhone revenue captured by Apple during the year-earlier quarter and blew out Wall Street expectations of $52 billion. It also was the second best holiday shopping season in iPhone history trailing only the 2017 holiday quarter.

No, the iPhone is not part of Apple's fastest-growing division; that honor goes to the Wearables, Home and Accessories group that includes the Apple Watch and the AirPods. The former is the top-selling watch in the world while the latter has a 50% share of the wireless Bluetooth earbuds market. During the last three quarters (fiscal third quarter 2019, fiscal fourth-quarter 2019, fiscal first-quarter 2020), this unit has seen annual growth of 48%, 54%, and 37% respectively.

The iPhone is returning to the "front and center" says one analyst


Still, Reuters reports that many Wall Street analysts are focusing on what they see as a strong performance by Apple's most important product. Loup Ventures' Gene Munster said that the iPhone 11 model led the way partly because of its pricing. The 64GB model, at $699, is priced $50 lower than the original price of the phone it replaced-the 64GB iPhone XR. D.A. Davidson analyst Tom Forte says that the performance of the iPhone during Apple's fiscal first-quarter is one example of what he expects from the company's iconic smartphone this year. "We see Apple’s December 2019 quarter as a microcosm for its calendar 2020 performance, with the iPhone, once again, returning to the front and center," he told clients. Forte says that Apple's new credit program, which allows Apple Card holders to finance an iPhone purchase from Apple interest-free for 24 months, was a major factor in the strong performance.


The release of 5G enabled iPhone models later this year is also expected to raise demand for Apple's handsets. Oppenheimer analyst Rick Schafer is a believer in that scenario. According to reliable TF International analyst Ming-Chi Kuo, we could see Apple unveil four different handsets in the fall. Kuo says that all four models will be compatible with both Sub-6GHz and mmWave 5G signals. That means that the first 5G iPhones will work with the next-gen wireless signals disseminated by all four major U.S. wireless providers.

Kuo says that Apple will release a 5.4-inch iPhone 12, a 6.1-inch iPhone 12 Plus, a 6.1-inch iPhone 12 Pro and a 6.7-inch iPhone 12 Pro Max. All four of these models will sport an OLED panel possibly with a 120Hz refresh rate. All four will be powered by the 5nm A14 Bionic chipset that will reportedly contain an amazing 15 billion transistors inside. The larger the number of transistors inside an integrated circuit, the more powerful and energy-efficient it is.

The iPhone 12 and iPhone 12 Plus should sport a camera module with a wide and ultra-wide camera. If you're wondering what the difference will be between the 6.1-inch iPhone 12 Plus and the 6.1-inch iPhone 12 Pro, it seems that the latter will have three rear cameras as opposed to the two on the former. The iPhone 12 Pro will have a wide, ultra-wide, and a telephoto camera. The iPhone 12 Pro Max will include those three cameras and add a Time of Flight (ToF) depth sensor.


The much-improved battery life could get another boost this year to cover the reverse wireless charging feature that Apple decided not to offer at the last moment in 2019. This will allow the 2020 iPhones to be used as a wireless charging pad, sharing battery power to help charge an AirPods wireless charging case, the Apple Watch, compatible handsets, and other devices.

Yesterday Apple CEO Tim Cook reported that the company has over 1.5 billion active devices and that figure includes nearly 1 billion active iPhones by our own estimation. Apple has been counting on these devices to help it raise the annual revenue of its Services division to $50 billion this year. Focusing on Services was a brilliant move by Apple that allows it to generate a recurring revenue stream from iPhone users, even those who haven't been updating their handsets. During the fiscal first quarter, Apple recorded Services revenue at a pace that would take it just over $50 billion for fiscal 2020. The unit includes Apple Pay, the App Store, Apple Music, Apple News+, Apple TV+, iCloud, Apple Care and Apple Arcade.

Apple's shares hit an all-time high today at $327.85 before closing regular NYSE trading at $324.34. The stock rose $6.65 or 2.09% giving Apple a valuation of $1.42 trillion. At least 15 analysts raised their target price for Apple's stock on Wednesday.

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14 Comments

8. strawberry

Posts: 127; Member since: Feb 20, 2019

i really see a lot of new iPhone in asia

7. obedchuni

Posts: 341; Member since: Jun 16, 2014

Wow a dream of other company.

6. meanestgenius

Posts: 23075; Member since: May 28, 2014

Sheesh! Apple does know how to make some money. Gotta give credit where credit is due. Great job, Apple.

11. Venom

Posts: 4109; Member since: Dec 14, 2017

Amazing how your tune changes when just before you were saying otherwise.

14. meanestgenius

Posts: 23075; Member since: May 28, 2014

I’ve never said otherwise when it comes to Apple knowing how to make money. Stop lying. If I said it, post the link proving it.

5. Rocket

Posts: 746; Member since: Feb 24, 2014

In your dreams, lol

3. CreeDiddy

Posts: 2290; Member since: Nov 04, 2011

Apple may reach a $2 Trillion market valuation by the end of this year. If they release 5G phones, grow their Apple TV+ service, focus a product around AR, release improvements on Apple Watch, increase Apple Music subscriber base, and grow their iPhone base globally at more than 15% yoy growth they will be driver's seat all year.

2. lyndon420

Posts: 6938; Member since: Jul 11, 2012

Once again apple care is listed as a source of revenue for apple. I wouldn't mind an article focused solely on apple care and how much money apple actually makes after the extended warranty repairs have been completed. I was under the impression that apple loses money when it comes to a.c.

4. Dr.Phil

Posts: 2574; Member since: Feb 14, 2011

I would imagine Apple Care works like most insurance companies: make money off “healthy” users to pay for those that aren’t. In other words, the majority of people that have it probably will not need to use it while there is a smaller percentage of those that have it and will need to use it. And remember there are stipulations to Apple Care that prevent abuse from happening: it only covers 2 incidents within a 24 month period. If that incident is a broken screen you pay $29. If it’s other accidental damage that’s $99.

9. Subie

Posts: 2467; Member since: Aug 01, 2015

I think Dr. Phil is correct. Has Apple really said they lose money from selling AppleCare? Apple has been on record as stating: "the costs of providing repair services has exceeded the revenue generated by repairs" These kind of (carefully worded) statements have been made because of questioning during the right to repair and anti competitive investigations Apple has been facing. Revenue generated selling their AppleCare insurance may actually be profitable...

13. Vancetastic

Posts: 1965; Member since: May 17, 2017

I know that I had Apple Care for two years, and never used it. I'd imagine there are lots of cases like mine.

1. Vancetastic

Posts: 1965; Member since: May 17, 2017

That headline seems a bit hyperbolic.

10. tbreezy

Posts: 275; Member since: Aug 11, 2019

Welcome to 2020. They pretty much all do it.

12. Vancetastic

Posts: 1965; Member since: May 17, 2017

That doesn't mean I have to like it!

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