Analyst: iPhone Will Post Double-Digit Sales Growth in the First Quarter



Apple (NASDAQ:AAPL) will report earnings in less than two weeks, and analysts are already placing their bets on how well the company did during its fiscal first quarter. T. Michael Walkley at Canaccord Genuity thinks sales of iOS devices could have climbed as high as 80 million for the quarter ended December 31.

Citing sales surveys in a note seen by Apple Insider, Walkley says that the data suggest iPhone sales grew 13 percent on the year to 54 million and that iPad sales grew 8 percent on the year to 24.8 million. Walkley also expects a sales split of about 2 to 1 between the iPhone 5S and the iPhone 5C, yielding an average selling price of about $620 for the smartphone.

Walkley holds a Buy rating on Apple stock and has a middle-of-the-road price target of $600. On average, analysts are expecting revenue to climb 5.3 percent in the first quarter to $57.38 billion and for earnings to climb about 1.9 percent to $14.07 per share. In 2012, fist-quarter revenues accounted for about 32 percent of full-year revenues, while first-quarter earnings accounted for about 35 percent of full-year earnings.

Apple’s iPhone accounts for more than 50 percent of total revenues, and thanks to strong back-to-back launches of new iterations of the flagship device, it also represents one of Apple’s top-growing revenue sources. This puts the device on a kind of pedestal: More than any other device, Apple is represented by the iPhone. In the fourth quarter, Apple actually saw shrinking year-over-year revenue growth for the iPad, Mac, and iPod. ITunes, Software, and Services was the company’s fastest-growing segment — if the trend keeps up, it will eclipse the iPad and the Mac as a revenue stream in the near future.

As the market matures, though, the differences between the iPhone and competing high-end Android products are evaporating. As Walkley wrote, per Apple Insider, “With each new high-end smartphone introduction featuring a slightly fast processor, slightly better graphics, marginally better camera, slightly thinner form factor, and slightly bigger screen, we walked away from CES essentially unable to distinguish what was new or different about any of the essentially identical looking LTE Android smartphones introduced.”

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