Schaeffer Chart. March 11th.
This says it all.
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TREFIS sees it going to $650 and shows analyst average at 588.
- iPhone constitutes 50% of the Trefis price estimate for Apple’s stock.
- iPad constitutes 12% of the Trefis price estimate for Apple’s stock.
- Macintosh (Desktops, Notebooks, Software & Services, Peripherals) constitutes 11% of the Trefis price estimate for Apple’s stock.
POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE
Below are key drivers of Apple’s value that present opportunities for upside or downside to the current Trefis price estimate for Apple:
- iPhone market share: Apple’s iPhone market share has increased at a fast rate from around 0.3% in 2007 to 8% in 2012, as per our estimates. Going forward, we expect it to continue to increase steadily to around 15% by the end of Trefis forecast period. The iPhone’s unique touch screen interface, and the intuitive and user friendly features are some of the factors behind its success. Also, the updated iOS boasts many new features including the much touted voice recognition software, Siri, the iCloud, Apple’s new Maps feature and the iMessage. Apple launched the iPhone 5 in September 2012 and saw record orders. It seems very likely that the latest in the iPhone series will turn out to be Apple’s best-selling iPhone yet. In case one out of five mobile phones is an iPhone in the long term, or in other words, iPhone’s market share increases to 20% by the end of Trefis forecast period, there could be an upside of 25% to our estimate for Apple stock. On the other hand, if Apple iPhone market share increases slowly to 10% by the end of Trefis forecast period, there could be a downside of around 11% to the Trefis price estimate for Apple stock.
- iPhone gross margins: Apple’s iPhone gross margins have declined in the past from 62% in 2007 to around 51% in 2010. However, Apple managed to improve its margins in 2011 to 55%, as per our estimates. Fierce competition with Android-based smartphones from Samsung, Motorola and HTC, as well as RIM, Nokia, etc, may have led to a discounting of older iPhones but component costs moved sharply in its favor to help Apple stem the decline in 2011. However, iPhone’s margins seem to have resumed their declining trend by falling slightly to 53% in 2012 and we expect it to continue doing so gradually to around 34% by the end of Trefis forecast period. In case iPhone margins decline more rapidly to around 25% by the end of Trefis forecast period, there could be a downside of around 10% to our estimate for Apple stock. On the other hand, if iPhone margins decline to only around 45% over the Trefis forecast period, there could be an upside of 10% to our price estimate.
For additional details, select a driver above or select a division from the interactive Trefis split for Apple at the top of the page.