Apple is expected to sell a record number of 75 million iPhones during the fourth quarter of 2015, believes analyst Steven Miluvonich of UBS. However, he also notes that fewer customers chose to buy Apple’s high-end models in comparison to a year prior.
Apple to hit new sales record
If Apple hits UBS’ 75 million unit prediction, it will surpass the 74.5 million iPhone units it shipped in the same quarter a year ago, thus setting a new all-time record. Miluvonich believes the December quarter will not be of much help to the stock in the short term. But at the same time, he says that investors are simply too bearish on Apple’s longer-term prospects.
“Consequently, we are inclined to take our short-term lumps and maintain the Buy rating given a solid franchise,” said Miluvonich, who maintains a 12-month price target of $130.
During the quarter, the iPhone sold at an average price of $662, said Miluvonich in a note Wednesday, citing the latest data from Consumer Intelligence Research Partners (CIRP). If this is true, then it means that the iPhone ASP declined from the $687 seen in the December quarter of last year.
CIRP found that Apple’s latest flagships, the iPhone 6s and iPhone 6s Plus, accounted for just 67% of December U.S. iPhone sales. This is less than the figures for 2014, when the flagship iPhone 6 and iPhone 6 Plus models accounted for 75% sales. Demand for the iPhone has not slowed in itself, but the mix of models appealing to customers has changed, suggests the CIRP data.
Not bullish on the stock
Raymond James analysts, in a note on Wednesday, stated that weaker than expected iPhone sales through March 2017 could weigh down the quarterly earnings growth rate of the company. The iPhone maker is scheduled to release its second quarter earnings report after the bell on Tuesday.
“The shares, in our opinion, could remain range-bound for a few more quarters,” said Raymond James’ Tavis McCourt.
On Wednesday, Apple shares closed up 0.17% at $96.83. Year to date, the stock is down by over 18%, while in the last five days, it is down by over 3%. In the last three months, shares have fallen by 15% versus a 7% decline for the Dow Jones Industrial Average. The stock has a 52-week high of $134.54 and a 52-week low of $92.