Published On: Mon, Aug 18th, 2014

Apple iPhone 6 could beat already lofty expectations

apple-iphone_6Apple's iPhone 6 launch could be even bigger than Wall Street's already high expectations, RBC Capital Markets analyst Amit Daryanani said in a research note Monday.

Apple  is expected to unveil its eighth-generation smartphone at a media event on Sept. 9. The new handset is seen coming in models with display sizes of 4.7 and 5.5 inches, compared with the current iPhone 5 family's 4-inch screen. The larger version of the new handset could be called the iPhone 6L, according to the website 9to5Mac.

"Multiple data points — supply-chain checks, off-balance-sheet commitments and our survey work — show material second-half 2014 upside vs. current expectations," Daryanani said.

Apple could end up selling more than 75 million iPhone 6 units in the September and December quarters, Daryanani adds. If that happens, Apple's earnings per share in the December quarter could be 10% higher than current estimates, he says. Under this scenario, Apple would sell 15 million iPhone 6 units in the September quarter and 60 million in the December quarter.

"Most supply-chain data is pointing toward Apple gearing up to ramp 70-80 million iPhone 6 units across the two form factors (4.7"/5.5")," he said. "This is a notable uptick from last year, when the supply chain ramped 50-60 million units. We think this iPhone cycle will be more material than prior ones largely because an increased screen size should drive a material upgrade cycle and position Apple to pick up share vs. the Android ecosystem on the high-end."

Daryanani has an outperform rating on Apple stock with a price target of 110. In early afternoon trading in the stock market today, Apple stock was up more than 1%, near 99 and just shy of a nearly two-year high of 99.44, touched on July 29.

Apple is being characteristically mum ahead of the new handset launch. It hasn't even confirmed the widely reported date for the media event.

Apple watchers expect the iPhone 6 to include a more powerful processor, a larger battery and perhaps an ultratough sapphire screen cover.

Click Tag(s) for Related Articles: