As more Android users ditch their mobile units for iPhones and current owners upgrade, Apple is expecting a lot of "kachings" for the yearend holiday season.
In dollars and cents, those happy rings of the cash register translate into expected sales for the fourth quarter of 2015 between $75.5 billion and $77.5 billion, reports Bloomberg. Besides the shift and upgrades, Apple CEO Tim Cook also cites continuous growth in China as the reason behind the tech giant's optimistic outlook.
Reuters reports that Apple stores in China are now 25 and a new store is opening every month. However, it notes that sales in the Asian giant went down in Q3. Creative Strategies analyst Ben Bajarin explains that the maturity of the Chinese market brings with it "spikes around the holidays and slumps before the release of a new phone."
The revenue-generator for the Cupertino-based firm is the iPhone since iPad sales are actually declining, while analysts are still watching the progress of Apple Watch sales which continue to be weak. The anticipated sales confirm that the smartphone remains to be Apple's most important product, although the record sales is raising concerns that the company's business could be near its peak.
In Q3, Apple sold 48 million handsets, higher by 22 percent compared to 12 months ago and amid a slowdown in the global smartphone market. iPhone sales generated $32.2 billion sales for Apple, larger than the combined Q3 earnings of Facebook and Microsoft.
If there is one confirmation of that growing concern, it would be the downward movement of the shareprice of Apple stocks which slightly dipped by less than one percent to $114.55 at the close in New York on Tuesday. On the same day, Apple reported a 31 percent boost in net income to $11.1 billion for the fourth fiscal quarter than ended Sept. 26.
Walt Piecyk, BTIG LLC analyst, comments, "IPhone dominates the results, but it's doing good enough to deliver growth for the company ... The concern was growth would be ending." JMP Securities analyst Alex Gauna adds, "The law of large numbers is working against them as they get bigger. It gets harder to show growth."
However, Apple Chief Financial Officer Luca Maestra points out that while looking at type of revenue growth in 2015 is difficult to replicate, "given our size we feel very good about our prospects for the future."