Apple’s 10-Q filing revealed huge off-balance sheet commitments which suggest that the iPhone 6S launch will break previous records.
At the end of the June quarter it was reported that the company had $26.5 billion in off-balance sheet commitments. That figure is a massive increase year-on-year, a fact highlighted by analyst Katy Hubert of Morgan Stanley.
Morgan Stanley analyst predicts massive revenue for September quarter
$26.5 billion is a 26% year-on-year increase and 15% sequential growth. Huberty believes that these numbers mean the company is preparing for year-over-year growth as the new iPhone is introduced, however some Wall Street analysts are concerned that the largely similar design of the new model will cause slower growth.
$22 billion of those commitments are related to outsourcing and components, a 41% increase from last year and 14% from Q1. The outlay will go towards components and capital assets such as product tooling and manufacturing process equipment.
Huberty extrapolated the commitments and claimed that revenue in the September quarter would reach $63 billion, but she did admit that this number seems “too high.”
Apple itself projected revenue for the September quarter between $49 billion and $51 billion. Although the company’s June quarter broke records, overinflated expectations caused a dip in its stock price this week. Investors had predicted that iPhone sales would be higher for the 3-month period.
Apple expected to release iPhone 6S in late September
The next-generation iPhone is expected to be released towards the end of the September quarter. Apple has traditionally released new handsets in late September, days before the beginning of Q4.
Although the new iPhone is already being called the 6S, it has not been officially named yet. Analysts are already predicting what new features the updated model will bring, and the consensus is that a new Force Touch screen will be introduced along with a raft of improvements to internal components.
Given the fact that the iPhone 6S is expected to look very similar to its predecessor, internal improvements will have to be significant in order to ensure that users are tempted to make the upgrade.
Will iPhone 6S be a sufficient upgrade over existing model?
Apple is expected to upgrade RAM to 2GB from 1GB in the next generation iPhone, in order to keep up with rival smartphone makers. It is also believed that both front and rear cameras will receive significant upgrades.
The addition of an A9 processor will improve performance, and a new Qualcomm modem should allow iPhone users to make better use of high-speed LTE connections as well as saving power.
Some analysts also predict that a new “rose gold” colorway will be introduced, matching the Apple Watch Edition.
Reports claim that production may have already begun, with manufacturing partners Foxconn and Pegatron allegedly asked to produce 85 to 90 million units in preparation for high demand over the holiday season.
The iPhone 6S is expected to face tough competition from Samsung. In fact, recent rumors floated the idea that the Korean company may be considering an early launch of its Galaxy Note 5 in order to get a head start over Apple in the high-end smartphone market.
Although Apple has a great reputation with consumers, shareholders must be hoping that the iPhone 6S offers enough new features compared to its predecessor in order to drive sales in a highly competitive market.