Apple (NASDAQ: AAPL ) may be losing market share to Google's fragmented Android operating system in many key markets, but by no means has Apple's growth in iPhone sales hit a peak.
Nowhere is this more clear than in the following chart, which shows the growth of annual iPhone sales for the trailing twelve months ending in Apple's second fiscal quarter.
While Apple reported a few individual quarters in the last twelve months where iPhone unit sales growth was lackluster, the more important big picture sales trend for the segment shows meaningful growth.
Further, this chart also illustrates how it's realistic that some analysts are expecting year-over-year growth in iPhone sales in the coming twelve months to be around 20%.
But even this estimate for the next twelve months may be an understatement of the segment's potential. Morgan Stanley analyst Katy Huberty's AlphaWise survey, which has been more accurate than consensus analyst estimates, projects 25% growth in iPhone sales in Apple's fiscal third quarter. And it's possible that pent-up demand for rumored iPhone 6 lines with larger displays could give the segment a startling boost beyond 20% growth, too.
Where does the growth end?
Best of all, there's little sign that Apple's opportunity for growth in the smartphone market has peaked. In fact, estimates for growth in the global smartphone market suggest the growth shown in this chart may continue even beyond 2015.
In 2013, global smartphone shipments were up 39%, according to IDC. Growth is likely to continue for some time; only 55% of all mobile phone shipments in 2013 were smartphones, IDC says. As Apple's iPhone line ages, and increasingly more models are available for lower prices, Apple will undoubtedly tap into a portion of the growing market of first-time smartphone buyers in the coming years.
And, of course, the short two-year upgrade cycle for iPhones looks poised to continue as carriers are more ambitious than ever about offering favorable terms to upgrade to the newest device. Upgrading users will almost certainly be the biggest driver to iPhone 6 after the rumored fall launch.
Further, if Apple can grow shipments in the coming months meaningfully, this gives it the opportunity to connect with a higher number of customers. And given the "stickiness" of Apple's ecosystem of products and services -- many of these new customers are likely to continue coming back for Apple products.
With iPhones accounting for 57% of Apple's sales and an even larger portion of operating profits, the growth trajectory of the important segment shows just how conservatively valued Apple stock may be at 16 times earnings.
But there's more to the story of Apple's growth potential, and one small company may benefit
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