Followers | 679 |
Posts | 140848 |
Boards Moderated | 36 |
Alias Born | 03/10/2004 |
Wednesday, January 15, 2020 7:04:47 AM
By: Motley Fool | January 14, 2020
It forced the tech titan to expand into services.
It's now been nearly four years since Apple (NASDAQ:AAPL) reported its first-ever decline in iPhone unit sales, which was an important inflection point for the company. Apple was able to keep squeezing growth out of the iPhone segment with price increases, but even that strategy seems to be hitting a ceiling, as most consumers balk at $1,000 phones and are keeping their handsets longer as a result.
This week, D.A. Davidson reiterated its buy rating on Apple shares while analyst Tom Forte boosted his price target on the stock to a whopping $375 -- now the highest on Wall Street. Somewhat counterintuitively, Forte argues that the iPhone segment peaking was a blessing in disguise.
Forcing Apple to expand into services
"In our view, the maturation of the smartphone market was, in hindsight, one of the best things to happen to Apple, because it forced the company to pursue noncore opportunities to drive future growth," Forte wrote in a research note to investors. In other words, Forte is impressed with how Apple has grown its services business in recent years, pursuing opportunities in financial services with Apple Card, video streaming with Apple TV+, and more.
Speaking of Apple Card, the analyst is also bullish on the new monthly installment plan that the company introduced last month, which allows Apple Card users to buy iPhones with 0% interest. That could end up being "a catalyst for iPhone unit sales for several years," according to Forte.
This year is also when Apple is widely expected to jump into 5G, which might create a multiyear growth cycle as consumers upgrade to the new technology. "There is enough complexity and hype when it comes to 5G (the next-generation wireless network) that we believe Apple can exploit this multi-year opportunity and generate positive smartphone unit growth for, at least, its next two product launches -- fall of 2020 and fall of 2021," the analyst says.
Forte also expects that wireless carriers will start to ramp up promotional spending for 5G devices as they pursue greater returns on the billions that they have collectively been investing in network infrastructure. U.S. carriers have been less generous on the promotional front in recent years, but will want to nudge consumers into upgrading to 5G. Any discounts could help offset some of the aforementioned high prices of iPhones, although consumers have signaled that 5G support may justify a premium.
Lastly, Forte points to the Cupertino tech giant's share repurchase program, which still has around $79 billion in authorization remaining, as a contributor to recent gains. The company typically provides updates on its capital return program in April or May when it reports fiscal second-quarter results.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
Recent AAPL News
- BHP Bids $38.8 Billion for Anglo American; Biden Unveils Historic Micron Technology Deal, and More News • IH Market News • 04/25/2024 11:48:40 AM
- Coca-Cola and Microsoft Sign Billion-Dollar Agreement, Apple Event Set for May 7, and More News • IH Market News • 04/24/2024 11:28:02 AM
- AKT Token Skyrockets on Upbit Listing, IBIT Holds Strong in Top 10 ETFs, and More Crypto News • IH Market News • 04/23/2024 04:34:08 PM
- Apple Loses Market Share in China, GM Surges in Pre-Market Following Upward Revisions for 2024 Projections, and More News • IH Market News • 04/23/2024 11:25:34 AM
- Li Auto Stock Drops 7.3% Amid Tesla Price Cuts, Salesforce Retreats from Informatica Deal, and Other Market Updates • IH Market News • 04/22/2024 12:09:21 PM
- Paramount’s Shares Surge Following Sony and Apollo’s Joint Bid; ISS Backs Berkshire Hathaway Director Re-election, and More • IH Market News • 04/19/2024 11:31:22 AM
- Apple to Invest $250 Million in Singapore Expansion, Oracle Commits $8 Billion to Japan Infrastructure, and More News • IH Market News • 04/18/2024 11:11:52 AM
- United Shares Surge 5.3% in Q1 2024 Earnings Beat; Take-Two Cuts 5% of Workforce, and More News • IH Market News • 04/17/2024 10:57:39 AM
- Ericsson Soars with 66% Net Profit Growth; Live Nation Under Antitrust Scrutiny in US, and More News • IH Market News • 04/16/2024 11:18:19 AM
- Samsung Surpasses Apple in Q1 Smartphone Market; Salesforce in Talks to Acquire Informatica, and More News • IH Market News • 04/15/2024 11:06:48 AM
- Paramount Global Board Shrinks, Morgan Stanley Faces Regulatory Probe, and More News • IH Market News • 04/12/2024 11:05:29 AM
- Costco Increases Dividend by 14%, Meta Introduces ‘Artemis’ AI Chip, and More News • IH Market News • 04/11/2024 11:24:54 AM
- Delta Generates US$37 Million Profit in Q1, Google and Intel Unveil Cutting-Edge AI Chips, and More News • IH Market News • 04/10/2024 11:13:48 AM
- Tesla Resolves Autopilot Lawsuit, JPMorgan Unveils Potential CEO Successors, and More • IH Market News • 04/09/2024 10:39:30 AM
- Boeing Down in Pre-Market Due to CEO Developments and Denver Incident; MicroStrategy Surges 11% with BTC Spike, and More • IH Market News • 04/08/2024 11:17:49 AM
- Apple Terminates 614 Employees, Disney Unveils June Crackdown on Password Sharing, and More Updates • IH Market News • 04/05/2024 11:38:57 AM
- Exxon Mobil Forecasts Earnings Decline, Twilio Seeks Board Tenure Changes, and More News • IH Market News • 04/04/2024 11:30:20 AM
- Cal-Maine Surges on Strong Quarterly Performance, Taiwan Earthquake Disrupts Tech Supply Chain, and More • IH Market News • 04/03/2024 11:12:20 AM
- GameStop Shares Tumble 20% in Pre-Market Trading Amid Revenue Decline, Direct Digital Plummets 42%, and More News • IH Market News • 03/27/2024 10:54:47 AM
- Apple’s Worldwide Developers Conference returns June 10, 2024 • Business Wire • 03/26/2024 05:00:00 PM
- Super Micro Computer and Seagate Shares Surge on Analyst Optimism in Pre-Market Trading, and Latest News • IH Market News • 03/26/2024 11:20:49 AM
- Crypto: AIOZ Network Partners with Alibaba Cloud, Google Integrates ENS Domain Balances, and Key Updates • IH Market News • 03/22/2024 05:32:29 PM
- FedEx Soars 13% with Profits Above Forecasts, Nike Hit by China Slowdown, and Latest News • IH Market News • 03/22/2024 01:07:53 PM
- Apple Pre-Market Drop Due to Antitrust Threats, Surprising Profit Boosts Micron Shares, and Latest Market Updates • IH Market News • 03/21/2024 11:17:26 AM
- JPMorgan boosts dividends, Chipotle unveils 50:1 stock split, and Latest News • IH Market News • 03/20/2024 11:15:48 AM
FEATURED Cannabix's Breath Logix Alcohol Device Delivers Positive Impact to Private Monitoring Agency in Montana, USA • Apr 25, 2024 8:52 AM
Bantec Reports an Over 50 Percent Increase in Sales and Profits in Q1 2024 from Q1 2023 • BANT • Apr 25, 2024 10:00 AM
Kona Gold Beverages, Inc. Announces Name Change to NuVibe, Inc. and Initiation of Ticker Symbol Application Process • KGKG • Apr 25, 2024 8:30 AM
Axis Technologies Group and Carbonis Forge Ahead with New Digital Carbon Credit Technology • AXTG • Apr 24, 2024 3:00 AM
North Bay Resources Announces Successful Equipment Test at Bishop Gold Mill, Inyo County, California • NBRI • Apr 23, 2024 9:41 AM
Epazz, Inc.: CryObo, Inc. solar Bitcoin operations will issue tokens • EPAZ • Apr 23, 2024 9:20 AM