On Tuesday, may 2, Apple will publish its financial report for the second quarter of fiscal 2017. Wall Street analysts expect the Mac and iPhone maker will report earnings per share (EPS) of $2.01. Revenue is expected to reach $52.6 billion Investing Experts cited three factors that allow to positively evaluate the future of the “Apple” giant.
1. Apple’s market share is growing in key market
According to the latest data marketing company Kantar, the relative market share of Apple is observed two opposite trends: the U.S. market share is growing, and in China — is declining.
In the United States in the past five months, Apple’s market share exceeds 40%, which was not observed since July 2013. In February, Apple’s market share was 42%, significantly higher than 38.3 percent recorded in February 2016. The market share of 3.7% combined with a decrease of 3% market share of Android in the U.S. over the same period (from 59% to 56%), makes one wonder what role it played in the fiasco of Samsung with exploding batteries model Note 7.
According to a recent study by PiperJaffray, 76% of respondents 5500 adolescents in the United States reported that use the iPhone. While 81% of these respondents intend to buy an iPhone. These figures seem very high, especially considering that Apple’s market share in the U.S. is 42%. Even if the data is too high, still the number of teenagers who use iPhone in the US is very large. Given how important customer loyalty in the industry and the desire of teenagers to have the latest model phone (due to the high interest to modern technology and the desire to keep up with friends), it gives good prospects for Apple.
2. Commemorative iPhone 8
Undoubtedly, the market launch of the iPhone 8 and a significant number of accompanying devices will be one of the most important events for consumers and investors in the recent history of Apple. iPhone 8 to be released in September-October 2017. Its release is timed to the tenth anniversary of the advent of the iPhone in the market. Almost unbelievable how quickly improved intellectual capabilities of mobile technologies and mobile performance over the last ten years. Analysts give positive Outlook on iPhone 8 for the three following reasons: a sustainable “ecosystem” of interconnected devices and services Apple is expected sharp increase in the capabilities of the new device and fascination with adolescents with Apple devices.
First, with regard to the “ecosystem” that Apple keeps users, offering full closed bundle of hardware and software, complicating the transition to devices competitors after you create the array its own apps and services iOS. This has always been one of the best competitive advantages of Apple. When all devices and services are integrated, it is often convenient to choose a new device from the same manufacturer.
Secondly, for a large part of consumers is quite important to upgrade your model to iPhone 8. According to the latest report on Apple from analysts CIRP, approximately 45% of iPhones are currently in use, released two years ago or even earlier. IPhone 6 and iPhone 6 Plus became one of the most successful models from Apple in the last few years. It is projected that the iPhone 8 will be the next model, which will cause a huge demand from Apple users.
3. Revenue growth from sales of Mac software
In the last quarter Apple sold the same number of Mac computers that in the same quarter a year ago. The income of this segment increased by 7% due to price increases and the release of the new MacBook Pro. Last year revenue from Mac sales fell by 10%, so the beginning of the year can be considered successful for this segment of Apple. This year could be a turning point for computer business the Apple in the direction of improvement.
Apple services have become another important segment of profit. The user base of the company has tens of millions active users, many of whom are willing to use applications and services of the company, in particular Apple Music. Income from App Store has also grown. Analysts predict that the revenues from this segment, based on the software (last year the increase was 18%) will increase and compensate for the lack of significant growth in two segments of hardware sales of Apple’s iPad and Mac.
