Apple (NASDAQ:AAPL) is, to put it simply, on fire.
After defying the doubters and shattering records in its recent earnings blowout, Apple has reasserted itself as arguably the most dominant company in technology today (heck, maybe even business as a whole).
However, investors, analysts, and the media tend to get restless. And perhaps unsurprisingly, they've recent started focusing on the year ahead for Apple, specifically the iPhone 6s . So, just what might the next 12 months look like for the world's largest public company? Let's take a look
Another big year of Apple
Many, myself included, have expressed concern that Apple shares could be ripe for a 2012-esque sell-off as Apple's iPhone 6 fueled upgrade cycle potentially wanes toward the end of the year. That's an understandable but distant fear as the rest of 2015 should prove to be stellar for Apple according to most analysts. Let's look at one analyst's commentary in particular.
Recently, KGI Securities notorious analyst Ming Chi Quo offered his own estimate for Apple TouchID-enabled devices in 2015. And since most of Apple's current product mix comes with Apple's fingerprint scanner, this estimate should serve as a fair proxy for Apple's overall iPhone and iPad sales for 2015.
Assessing whether you think this 11% estimate seems high or low boils down to just how much of the iPhone 6 upgrade supercycle demand Apple met during its home run FY Q1.
As we now know, Apple's iPhone shipments grew an astounding 57% during Q1 '15, while the iPad business contracted -22%. On balance, this led to a 30% year-over-year increase in Apple's total units shipped during the quarter. And thanks to the sheer magnitude of its Q1 performance, Apple will now need to only grow its combined iPhone and iPad shipments a mere 3.7% over the final three quarters of its fiscal year in order to hit Kuo's original 262 million total TouchID units this year.
It's certainly possible that Apple pulled some of the demand from the later stages of its upgrade cycle into FY Q1 because of the hype with the iPhone 6 and 6 Plus. It's difficult to say for certain. However, even if Apple sated a significant chunk of that full-year demand in Q1, eeking out a mere 3.7% increase in its unit shipments over the next 9 months seems eminently doable.
Plenty of upside
So, even as the Kuo's units growth target seems achievable, there are plenty of additional factors at work that will also likely have a positive impact on Apple's results.
For starters, the vast majority of Apple's product portfolio is TouchID enabled, but not all of it. And although we're talking about older and now less popular models like the iPhone 5c and the original iPad Mini, Apple will certainly sell at least some of these older products. This means that Kuo's 262 million target actually probably slightly understates Apple's total iPad and iPhone unit shipment figures.
There are also the litany of other tailwinds that Apple enjoys at present. Apple's due for a dividend increase any time now. The Apple Watch, while I remain skeptical of the first version, holds massive long-term potential for Apple's financial performance. Apple is on the verge of launching updated versions of its iTunes software and Music app, which should revive Apple's ailing music business. And Apple is also apparently still working on a streaming TV product in the wake of Dish Networks' launching of its Sling TV product. Each of these events should have a positive influence on Apple stock. So, while some might be growing skeptical of the growth outlook at Apple, hopefully you're convinced plenty of catalysts remain for the world's largest publicly traded company.
When he's not talking about Apple the company, Andrew Tonner certainly enjoys also eating Apples (the fruit) among many other things. Andrew also owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.