Are 75 Million iPhone Sales Enough?

By Douglas A. McIntyre Updated Jan 13, 2:36PM EST · Published Jan 26, 6:51AM EST

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Are 75 Million iPhone Sales Enough? — © courtesy of Apple Inc.

As Apple Inc. (NASDAQ: AAPL) earnings approach, nothing matches the importance of iPhone sales, particularly in China. The consensus among analysts is that Apple sold 75 million iPhones in the quarter it is about to announce. Anything short of that will be disastrous for its share price, which has been under pressure for months.

Sales in the fourth quarter depended heavily on holiday sales, sales in China and consumer appetites for an aging iPhone family. While aging depends on an odd definition for Apple, a few quarters of sales of a new generation of the smartphone move some customers to the point where they either have iPhones already or a desire to wait for the iPhone 7, which probably will be released in the second half of this year. Apple’s new ad campaign has a tag line for its newest smartphone, the iPhone 6s, that reads, “The only thing that’s changed is everything.” Apple did not make that claim when the iPhone 6s was new. So, the company is pushing features that are many months old.

Hanging over both iPhone and iPad sales is the specter of the success of Alphabet Inc.’s (NASDAQ: GOOGL) Google Android OS, which is used in almost all non-Apple tablets and smartphones sold in the world — leaving aside progress made by Microsoft Corp. (NASDAQ: MSFT) and its new mobile versions of Windows. Samsung, once Apple’s worthy competitor, counts on new Android phones to get share back from Apple. The effort just might work.

In Apple’s most recently reported quarter, its revenue from Greater China was $12.5 billion, up 99% from the same quarter the year before. That was against Apple’s global sales of $51.5 billion. Tim Cook, Apple’s CEO, has made the point that China sales must rapidly become a much larger portion of his company’s revenues or overall growth will stumble.
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Apple has always faced the challenge of consumers who want the newest iPhone and may wait until it is shipped. How many people will hold their “old” iPhone 6 models and wait for the iPhone 7? No one knows, but it is a threat to sales.

Apple’s stock has slightly recovered from a brutal sell-off that has driven its shares down 30% in the past six months. Over the past five days, the stock is down 3%. Even those figures will worsen if the Apple sold fewer than 75 million iPhones in the quarter about to be announced.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.