PREFACE
The Apple Inc. (NASDAQ:AAPL) iPhone 7 is outperforming forecasts according to several analyst notes.
STORY
Apple Inc. is a Top Pick for CML Pro -- one of our first, and we continue to be bullish on the company's future. The iPhone 7 and iPhone 7 Plus are apparently doing much better than 'anyone' expected.
Back in March we wrote "Apple is Leaving a Bumbling Wall Street in the Stine Age," in which we wrote that this new iPhone could push total iPhone sales in calendar Q4 (Oct - Dec) to 80 million units. That would not only mean slower shrinkage than was forecast, but in fact would mean a return to growth and the largest earnings in one quarter in the history of financial markets. We stand by that forecast, although we also note that it's hardly the bullish thesis for Apple -- it's just a piece.
Here's some more information we are getting that Wall Street is finally picking up on and some of it is laughable that it's coming this late:
"Citigroup's Jim Suva reiterates a Buy rating on Apple shares, and raises his price target to $130 from $120, after raising his iPhone unit shipment estimate for the December-ending fiscal Q1 to 79.4 million from 73 million"
BTIG Research's Walter Piecyk notes this morning long wait times, writing "the initial results indicate longer waits for iPhones and are supportive to our thesis that Apple can return to growth in the December quarter."
"The iPhone 7+ is experiencing even longer shipping estimates for nearly all models and across all distribution points when compared to last year. In fact, at Verizon it takes 48-62 days to get a mid-range iPhone 7+ compared to 21-28 days last year for an iPhone 6s+."
Source: Tiernan Ray via BARRON'S
More from Apple Inc. (NASDAQ:AAPL)
It likely deserves its own dossier, but Apple is also pushing forward into enterprise sales a lot faster than Wall Street estimated (again). "Alliances with the likes of IBM and Cisco have lifted Apple's enterprise sales, and so has a large base of office workers who want to use iOS devices at work" (via TheStreet).
More from that article reads:
"Though they haven't produced the kind of hype and media attention its consumer-focused product launch events do, the steady stream of partnerships Apple (AAPL) has been announcing with major enterprise tech players is worthy of investor attention.
This is particularly true given how technology trends and demographics strengthen the potential impact of many of these alliances."
China
Apple is on risk alert because of the ever growing combativeness of the communist regime in China. But, the way around that has been to invest heavily in the country -- not for workers, but for technology. That's exactly what Apple Inc. has done.
"Apple (AAPL) is opening a 300 million yuan ($45 million) research and development center in Beijing, its first ever in China, as the U.S. technology giant looks to reverse declining sales in the country" (YahooFinance)
The Zhongguancun Science Park Administrative Committee said this:
"This is the first R&D Center that Apple has directly invested in China.
In the future, this R&D center will be dedicated to researching and developing in the areas of computer hardware and software, telecommunications, video and audio equipment, consumer electronic products, information technology and other advanced technologies."
This is the right move from Apple Inc. (NASDAQ:AAPL) and if iPhone sales go well in China for next quarter, we will remove the risk alert.
The author is long shares of Apple Inc. (NASDAQ:AAPL).
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