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TECHNOLOGY

The iPhone 6 Could Be Apple's Biggest Hit

The tech giant is producing far more of the devices than analysts initially predicted.
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Apple's iPhone 6 could be a serious blockbuster, says RBC analyst Amit Daryanani in a new note Monday.

"Most supply chain data is pointing towards Apple gearing up to ramp 70-80 million iPhone 6 units across the two form factors (4.7"/5.5")," Daryanani says. "This is a notable uptick from last year when the supply chain ramped 50-60 million units."

In English, that means Apple is telling suppliers to make ~75 million iPhone 6 phones for the second half of the year, which is ~36 percent more than it requested last year. This would make the iPhone 6 a giant hit for Apple.

This would blow away Daryanani's own estimates that Apple will ship 65 million units in the second half of the year. If iPhone sales hit that number, then EPS could be 10 percent better than Daryanani expects. 

Daryanani's note helped drive Apple's stock higher today. It closed at $99.16, up 1.2 percent, which puts it within striking distance of its 52-week high of $99.44. Apple's split-adjusted all-time high is just north of $100 per share. 

The coming boom in iPhone sales isn't unexpected. Apple usually sells most of its iPhones in the fourth quarter, during the holiday shopping season. You can see the company's revenue peak at the end of each calendar year in this chart:


Those blue mountains at the bottom of the chart represent heightened iPhone sales during the holiday season.

Daryanani also says Apple will sell about 10 million phones within a week of the iPhone's launch.

We have previously reported that the iPhone 6 is likely to come in two screen sizes: 4.7 inches and 5.5 inches, respectively. That's one important reason RBC may have forecast so many iPhone sales. There is pent up demand for a bigger iPhone.

That's good for Apple, because the iPhone has become synonomous with its bottom line.

As Mac and iTunes sales have largely flatlined in recent years, the iPhone has captured a tremendous amount of revenue. The iPad has also eclipsed Mac revenues, as shown here: 


We're also seen rumors that the iPhone 6 may have a longer battery life than its predecessor's, which would be a huge win for Apple fans everywhere. The iPhone's battery has long been considered the device's Achilles' heel.

--This story first appeared on Business Insider.

IMAGES: Courtesy Company, Courtesy Apple Inc.
Last updated: Aug 19, 2014




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