This time of year yields more Apple doom predictions than New Year’s resolutions, so it’s no surprise that Apple analysts have been naming 2016 as the year iPhone sales finally fall off a cliff.
But according to Brean Capital, not only is Apple stock still worth buying, with a $170 price target, but investors should look through the “supply chain ‘noise'” and see the potential for iPhone sales to hit around 250 million units next year — or 7 percent to 10 percent growth from Apple’s already stellar 2016.
In particular, Brean analyst Ananda Baruah is excited about the rumors of a new, 4-inch iPhone being released next year, which he thinks can add another 15 million to 30 million unit sales on top of what Apple managed this year.
“We believe we can ‘book’ the 4-inch iPhone intro in the March-to-April time frame—and that it can provide 15M – 30M incremental units to CY16. Ultimately, we believe this could provide AAPL the ability to ship ~250M iPhone units for CY16, or 5% – 10% unit growth, vs. what we believe is an Increasing Street view of iPhone unit shipment declines of 3% – 5%. While opinions vary regarding the veracity of AAPL’s potential to intro this phone, we are of the view that it’s a done deal, and that AAPL will be shipping in the Jun Q.”
While Baruah doesn’t mention it, I think Apple’s iPhone upgrade program will also make a big difference in 2016.
Do you think 2016 will be another year of spectacular growth for the iPhone, or will this be the year Apple finally maxes out on the spectacular upward momentum it’s had for the past few years in its smartphone division? Leave your comments below.