Apple’s iPhone business has been sluggish, but here’s the good news – Life Changer

Apple’s iPhone business has been sluggish, but here’s the good news

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By Emily Bary

Apple continues to win market share of both units and revenue, says BofA – and the company even has an opportunity with buyers of used smartphones

Apple Inc. likely saw declining iPhone unit shipments over the last three years, but a BofA Securities analyst sees some silver linings.

The smartphone giant continues to win market share in terms of both industry revenue and units, in the view of BofA’s Wamsi Mohan. Additionally, Apple (AAPL) is having success in convincing people to pay for higher-priced iPhone models, a trend Mohan thinks could persist – and help to outweigh overall pressures in the company’s China business.

“We continue to see Apple ship more high-value units over time and thereby continue to take revenue share,” Mohan wrote. The company commands almost the entire market of devices that sell for at least $1,000, he added.

Used iPhones are becoming a greater portion of Apple’s overall installed base of smartphones – and Mohan sees an opportunity.

“We expect those who choose to buy used iPhones will slowly over time move to buy new iPhones and those that buy new iPhones will keep up with the iPhone refresh cycle of approximately every four years,” he noted.

Plus, even those who opt to buy used iPhones from third parties still contribute to Apple’s coffers. Services revenue per device in Apple’s installed base reached $73.01 last year from $50.59 in 2019, and Mohan expects a further move higher.

Mohan continues to rate Apple shares at buy, and his $225 price target implies roughly 30% upside from current levels.

His optimism comes as overall sentiment toward Apple’s stock remains depressed. Shares are down about 10% to start the year, while the S&P 500 SPX is up 8%.

Read: Apple’s stock is in a ‘funk.’ Could Warren Buffett be selling more shares?

Still, Wall Street analysts remain largely bullish, as 25 of the 43 who are tracked by FactSet hold bullish ratings. Apple bulls see various catalysts ahead, including a greater push into generative artificial intelligence and the company’s annual update on its capital-allocation program.

See more: Here’s how Apple could uniquely leverage AI – and send its sagging stock higher

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

 

(END) Dow Jones Newswires

03-12-24 1300ET

Copyright (c) 2024 Dow Jones & Company, Inc.

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