Can Apple Sell 50 Million iPhones?

October 24, 2016 by Paul Ausick

When Apple Inc. (NASDAQ: AAPL) shares fourth-quarter and fiscal-year 2016 results after markets close on Tuesday, analysts are expecting the company to report iPhone sales of 45 million for the quarter and 211 million for the year. While quarterly sales have slipped in recent quarters, a drop in full-year sales would be a first for Apple since the iPhone was introduced in 2007.

Apple sold 231 million units in 2015, up 37% year over year, as demand for the larger iPhone 6 and 6 Plus boomed. The iPhone 7 and 7 Plus began shipping to consumers in late September and won’t have much impact on fourth-quarter sales. Demand for the latest versions of the iPhone have been very robust, according to both T-Mobile and Sprint.

Helping to boost Apple’s fiscal first-quarter sales is the withdrawal of Samsung’s Galaxy Note 7 from the market due to the device’s exploding battery problems. But that didn’t happen until earlier in October and won’t help Apple’s prior quarter sales either.

Apple sold 48 million iPhones in the fourth quarter of last year and to beat that number this year would be nothing short of a miracle. Last year’s year-over-year fourth fiscal quarter increase was a massive 23%. To reach 50 million in the 2016 fourth quarter would mean a sales increase of 4.2%, and while some analysts are looking for a total of more than 45 million units, none that we’ve seen is forecasting 50 million.

We’ve already noted that several analysts are looking for north of 70 million iPhone units sold in the current quarter. In the first quarter of fiscal 2016, Apple sold 74.8 million iPhones.

The consensus analysts’ estimate for fourth-quarter earnings per share (EPS) is $1.65 and revenues are forecast at $46.89 billion. For the full year EPS is pegged at $8.26 on revenues of $215.67 billion.

The company’s shares traded up about 0.7% midday Monday, at $117.36 in a 52-week range of $89.47 to $123.82. The 12-month consensus price target is $128.32.

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