Apple captured 93% of smartphone profits in Q4, according to a new report from Canaccord Genuity. Analyst Mike Walkley has raised his price target on AAPL to $145 from $135 and says that market data suggests continued strength for the iPhone 6 upgrade cycle.
Walkley also predicts that by the end of 2018 Apple may have one third of all smartphone users.
We believe the strong iPhone 6 replacement sales should continue during C’15, as we estimate only 15% of the current estimated 404M iPhone installed base has upgraded to the new devices. We also anticipate continued strong share gains for the larger screen iPhones from high-tier Android smartphones during C’15 driving strong growth in the iPhone installed base and model the iPhone installed base growing to 487M subscribers exiting C’15 up 20% Y/Y. Longer term, we anticipate a gradually moderating rate of growth for the installed base from C’16 through C’18 and estimate 650M iPhone users exiting C’18. We note this base would only represent 1/3rd of an estimated 1.82B global premium smartphone subscribers anticipated by C’18. Finally, we anticipate steady long-term iPhone replacement sales within this growing iPhone installed base, and we believe this combined with our modest installed base growth expectations position Apple for steady sales of roughly 210M-215M iPhone units annually between C2015 to C2018.
As you can see in Walkley's chart below, it's calculated that Apple accounted for a vast majority of Q4 profits with Samsung getting the remaining profit. The other venders operate at almost no profit or negative.
Take a look at the chart below for more details...
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Walkley also predicts that by the end of 2018 Apple may have one third of all smartphone users.
We believe the strong iPhone 6 replacement sales should continue during C’15, as we estimate only 15% of the current estimated 404M iPhone installed base has upgraded to the new devices. We also anticipate continued strong share gains for the larger screen iPhones from high-tier Android smartphones during C’15 driving strong growth in the iPhone installed base and model the iPhone installed base growing to 487M subscribers exiting C’15 up 20% Y/Y. Longer term, we anticipate a gradually moderating rate of growth for the installed base from C’16 through C’18 and estimate 650M iPhone users exiting C’18. We note this base would only represent 1/3rd of an estimated 1.82B global premium smartphone subscribers anticipated by C’18. Finally, we anticipate steady long-term iPhone replacement sales within this growing iPhone installed base, and we believe this combined with our modest installed base growth expectations position Apple for steady sales of roughly 210M-215M iPhone units annually between C2015 to C2018.
As you can see in Walkley's chart below, it's calculated that Apple accounted for a vast majority of Q4 profits with Samsung getting the remaining profit. The other venders operate at almost no profit or negative.
Take a look at the chart below for more details...
Read More