iPhone 6 And iPhone 5S Could Be Outsold by iPhone 5C

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iPhone 6 And iPhone 5S Could Be Outsold by iPhone 5C
<a href="https://pixabay.com/users/JESHOOTS/">JESHOOTS</a> / Pixabay

The iPhone 6 and iPhone 5S may not even have a chance with the rumored budget iPhone. This is what analyst Steve Milunovich, from UBS, thinks will happen in the near future.

iPhone 6 And iPhone 5S Could Be Outsold by iPhone 5C

Estimates for iPhone 5C sales

The iPhone Light (sometimes referred to as iPhone 5C or iPhone M) could sell a total of 92 million units toward the end of 2014 and could possibly account for over a total of 53 percent total of iPhone sales. Since it’s estimated that this phone will launch by the end of the year, the iPhone Light will make up about 3 percent of the total of iPhone sales in 2o13.

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Potential of sales for iPhone 5s and iPhone 6

Milunovich explained in more detail, “‘In our model, the iPhone M is dilutive not only to gross margin but to gross profit dollars. The impact of the M depends on assumptions. We estimate the 4/4S, which the M would replace, currently have a gross margin of 55 per cent because of the low cost of older components. We also assume the gross margin of the M will be near 32 per cent. And we estimate shipment of 92 million iPhone M units in F14 [Fiscal year 2014]. ‘Because the M has such a lower gross margin than the 4/4S, the M reduces earnings in our model. iPhone gross profit declines by 4% or $1.6bn with the iPhone 5/5S profit up $4.9bn and the 4/4S/M profit down $6.5bn. The net iPhone impact is a reduction to F14E EPS of $1.16. In this case, Apple Inc. (NASDAQ:AAPL) would be looking to add new users to its ecosystem at the expense of short-term profit, which CFO Peter Oppenheimer said the company occasionally does.”

A cheaper iPhone could do wonders for Apple Inc. (NASDAQ:AAPL) and increase interest in their brand. However, it could cause Apple Inc. (NASDAQ:AAPL) to lose a lot of money in the long run as the iPhone 5S and iPhone 6 have potential to be key sellers.

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