Anton Falk Capital Partners: The effect of the new iPhone X on the stock price

ZURICH - Nov. 2, 2017 - PRLog -- The reports show that the sales on the iPhone 8 and iPhone 8 Plus are being low, and this exactly what to expect if you anticipate the strong release of the X.

The new iPhone X got available in presale Friday morning, 26 Oct, and in the next ten minutes the allocated stock for presales ran out. The official Apple response has been that the demand is "off the charts".

Daniel Hendricks said that he expects at least a 25-30% year over year unit sales growth. "Looks like people are lured by the new X model and by its new features" he explained, "A lot of people seem to already trade their iPhone 8 and 8 Plus on recycling sites, trying to cash in while the value is still high" he added, "…people are just excited by the new face recognition technology"

Our assumption is that the sales on the iPhone 8 and 8 Plus will decrease for a while but the demand for the X is what will drive overall sales for the overall cycle. Although not relevant for this time frame, the face ID technology will drive increased demand into the next couple of generations.

Last year's September through March quarters generated iPhone revenue of about $116 billion. The figures I suggest for this year would produce $147 billion - $31 billion more. At a profit margin of 21%, this would add about $6.4 billion of incremental earnings or about $1.26 per share over the three quarters or roughly $1.90 incremental for the year. This alone would be sufficient to drive the current price to $198. Add to this growth in other areas, and you easily have $200. Any PE expansion from greater confidence would add only more.

We expect a number of 220 million units to be sold and the share price to run over $205.

For further information, visit: https://www.antonfalk.com