Apple Inc iPhone Sales Growth Driven by Emerging Markets, U.S. Carriers; Stock to Reach $750 After iPhone 6
Apple Inc's higher-than-expected iPhone sales had surprised investors after the release of its latest earnings report last quarter. Many analysts have speculated on the catalysts of the company's revenue as Apple's stock finally crossed the $600 mark.
Many analysts believe Apple may have capitaliSed on the cheaper iPhone 4S in emerging markets and the price elasticity of the low-end iPhone. However, Bernstein analysts disagree. Tony Sacconaghi Jr., Jonathan Cofsky and Eric C. Garfunkel have laid out the main drivers of Apple's recent iPhone success in a report.
According to the analysts, Apple's executives have taken advantage of its strength in emerging markets with more low-end iPhones being sold every quarter. The analysts have observed a significant decline in Apple's average selling price based on the data.
The sales of low-end iPhones like the iPhone 4S may have driven Apple's iPhone sales in its recent earnings report. Other analysts suggested that Apple may have become more competitive because of the cheaper handset especially in emerging handsets where customers can't afford to buy premium-priced phones.
The Bernstein team also believes that the U.S. market had bounced back during the March quarter. Mobile carriers have played a more significant role in pushing iPhones to customers with the inclusion of prepaid mobile carriers in emerging markets.
Apple Inc has beaten analysts' expectations and its own guidance by earning $45.6 billion in revenue for the first quarter of the calendar year and the second quarter of the fiscal year. Apple surpassed its iPhone sales record in the same quarter in 2013 by selling 6.3 million more iPhones.
With the upcoming release of the iPhone 6, many analysts predict the new iPhone will drive sales even higher.
Stock to reach $750 price target
With Apple crossing the $600 mark, investors are hopeful that shares will continue to soar after the company's WWDC event on June 2. Analysts have raised their price targets for Apple stock and remain optimistic that stock price will reach $650 and even $750 in the future after the company will release its new products, including the iPhone 6 with a bigger screen. According to reports, Wall Street may have realised that Apple stock may be more resilient than previously thought. Investors and Apple fans will just have to wait and see what's in store for them this year.