In its second 2016 fiscal quarter, Apple Inc. (NASDAQ: AAPL) reported iPhone sales of 51.2 million, down from 61.2 million in the prior year period. Third-quarter sales fell to 40.4 million from 47.4 million in the same quarter of 2015.
The average estimate for sales in the company’s fourth quarter is around 45 million, down from 48 million in the year-ago quarter. But thanks to Samsung Electronics’ troubles with its exploding Galaxy Note 7 and the Korean firm’s decision to stop selling the new model, the prospects for Apple’s December quarter have brightened considerably.
Several analysts believe the new iPhone 7 and 7 Plus, combined with the withdrawal of Samsung’s top of the line competitor, will boost Apple’s sales in the holiday quarter. Morgan Stanley’s Katy Huberty has raised her “build” estimate from 72 million to 73 million units. Huberty also raised her September quarter shipment estimate by 1 million, to 44 million according to a report at Barron’s.
Credit Suisse analyst Kulbinder Garcha estimates iPhone unit sales of 48 million in the September quarter and 78 million in the December quarter, noting that “Samsung’s Galaxy Note 7 struggles and recent halting of production … can only be additive.” Worse for Samsung, Barron’s cites Garcha: “What we’ve seen in previous shifts is that once people shift away, they don’t come back, because Apple has such high customer loyalty ratings, on the order of 90%.”
Simona Jankowski at Goldman Sachs is also cited at Barron’s saying that supply of the iPhone 7 is still “not catching up to demand” and, according to Goldman survey, the new iPhone is “the top consumer electronics product for the holidays in terms of purchase intentions.”
Given all the positive views, it seems that the only thing that could keep Apple’s holiday quarter sales below 70 million is some sort of manufacturing glitch. If Apple can build them, the people will buy them.