Consumer Electronics
Can Apple Sell 100 Million iPhones?
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Apple Inc. (NASDAQ: AAPL) posted a breakout quarter as virtually every one of its businesses surged. While iPhone sales were not terribly impressive, up 3% to 41.7 million, the results only set the stage for the fourth quarter, which should explode because of the holidays and a full quarter of sales of the iPhone 8 and iPhone X. Apple could have its first 100 million iPhone quarter.
CEO Tim Cook hinted at his expectations for the current quarter:
With fantastic new products including iPhone 8 and iPhone 8 Plus, Apple Watch Series 3, and Apple TV 4K joining our product lineup, we’re looking forward to a great holiday season, and with the launch of iPhone X getting underway right now, we couldn’t be more excited as we begin to deliver our vision for the future with this stunning device.
The hint will have to turn into reality. Apple’s calendar third-quarter revenue was $52.6 billion. The holiday quarter forecast is for revenue of $84 billion to $87 billion. The high end of that range assumes that iPhone sales will be particularly impressive.
Several things point the way to breakout iPhone sales. Cook said orders for the iPhone X already have reached what he said were “very strong.” Another key to Apple’s success would be a turnaround of its faltering Chinese operations. In the past, Cook has said that without success in the world’s largest smartphone market, it would be impossible for Apple to meet its long-term goals. During Apple’s earnings call, Cook said, according to Barron’s:
Cook noted a return to growth in “Greater China,” where the company enjoyed “unit-share gains” for iPhone, iPad, and Mac. He said it was an all-time high for Mac and services revenue in China.
For the reported quarter, Greater China sales were $9.8 billion, up 12% from the same quarter a year ago. But Apple’s iPhone sales have fallen behind those of local vendors Huawei and Xiaomi. That trend will have to end for Apple’s current quarter iPhone sales to be explosive.
And, finally, Apple has to build and ship enough iPhone 8 and iPhone X models to keep up with demand. This has been a concern, particularly with the iPhone X, for which there is already a long waiting period that stretches into December in some cases.
The hurdle to 100 million iPhone sales in the final quarter of the year may be a byproduct of its own success.
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