Understanding Apple Inc. (AAPL): iPhone Sales Are Charging

The future of Apple

Meanwhile, looking forward, DigiTimes reports that integrated chip orders by Apple Inc. (NASDAQ:AAPL) “have nearly doubled over the prior quarter, according to sources at its supply chain partners.: They continue:

However, with a new model set to launch, IC shipments for iPhones will ramp up to 40 million units in the third quarter, the sources predicted.

Strategy Analytics predicts:

The global smartphone user base is set to grow rapidly over the next four year [sic] and we forecast it to almost double between 2013 and 2017.

In another report they summarize:

Android will remain the dominant smartphone OS for the next few years, but its share will peak in 2014, while the global share of iOS is unlikely to grow much further
so long as Apple maintains its premium-tier-only strategy.
[emphasis added]

There are many rumors that Apple Inc. (NASDAQ:AAPL) is planning exactly to change this, with a lower cost iPhone in the works.

Conclusion

All the optimism here needs to be tempered with the reminder that we still have to see if we continue to have falling margins. A growing top line does no good if margin erosion causes a falling or stagnant bottom line. This also remains to be seen.

Still, many people have been puzzled by how Apple Inc. (NASDAQ:AAPL)’s share price has languished in the low $400s range for so long. The news from Verizon Communications Inc. (NYSE:VZ) suggests that the pessimism of the last few months may have been unwarranted. A spike in iPhone sales, and renewed growth if coupled with a stabilized gross margin, would likely kick start a revival in share price.

Malcolm Manness owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT).

The article Understanding Apple: iPhone Sales Are Charging originally appeared on Fool.com.

Malcolm is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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