Per AppleInsider, Apple Inc. (AAPL) is poised to sell 71.5 million iPhones in the ongoing first quarter of fiscal 2015. Meanwhile, shares of Apple rose to an all time split-high of $119.75 on November 25, 2014 following the news of Apple’s market capital surpassing $700 billion.
If the rumors turn out to be true, it will represent a 40% jump over 51 million iPhones sold in the year-ago quarter and an 82% surge sequentially.
The holiday season records high volume of sales in the U.S. Per reports, iPhone 6 is believed to lead the sales surge for Apple this year and is expected to account for approximately 60% of net sales of the company during the ongoing quarter.
However, iPhone 6 Plus is expected to register sales of 15 million only as Apple is currently plagued by a supply shortage due to heavy demand and production problems.
We believe that the large-screen iPhones including iPhone 6 (4.7 inch) and iPhone 6 Plus (5.5 inch) are endeavors on part of Apple to regain its lost market share in the face of large screen devices from Samsung, HTC and others. The efforts seem to bear fruits for the tech giant with iPhone 6 set to lead the sales surge.
However, in the post-holiday season, sales are expected to drop significantly with iPhone 6 sales likely to fall to 21.6 million and iPhone 6 Plus sales coming down to a paltry 10.2 million. iPhone 5S is also expected to experience a decline from 8.8 million in the first quarter to 7.3 million in the second quarter of fiscal 2015.
Nevertheless, Apple’s lower variant models including iPhone 5C and 4S are expected to register robust growth in the post-holiday season as well. Sales of 5C are expected to gain from lower promotional pricing while Apple is expected to introduce 4S into more emerging markets. Moreover, Apple is expected to release new 4.7-inch and 5.5-inch smartphone products next year with updated hardware.
Recently Apple’s market cap surged to $700 billion, which, in turn is a clear indication of the fact that the company is well-set on its growth trajectory.
Per Bloomberg, Apple’s market capitalization is 1.7 times that of the runner-up, Exxon Mobil (XOM), which is worth $405 billion. Apple also happens to be way ahead of its competitor, Google (GOOGL) with a market cap of $370 billion. However, when it comes to highest market capitalization coupled with adjustment for inflation, Apple ranks second to Microsoft (MSFT) which reached a market cap of $620.6 billion in 1999.
We believe that the surge in market capitalization was primarily attributable to the robust performance of the recently released large-screen iPhones which registered sales of 10 million in the first weekend of its release itself. Also, the new slimmer and thinner iPads as well as the new payments system are major positives for the company.
We believe that the company will continue delivering robust performance going forward driven by its robust and innovative product pipeline including iWatch, scheduled for an early 2015 release.
Currently, Apple sports a Zacks Rank # 1 (Strong Buy).
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