The Future of Apple Inc. (NASDAQ:AAPL) Lies in the iPhone X Sales

October 31, 2017, 12:32 pm ET, BY Simon M.- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Recent news reports indicate that Apple Inc. (NASDAQ:AAPL) sales of the iPhone 8 and 8 Plus unveiled on September 12 have been slower as compared to similar quarters in previous years. However, the low sales of the iPhone 8 and 8 Plus were largely driven by the fact that many loyal Apple customers were waiting to purchase the more advanced iPhone X.

Article Summary

Apple has recently reported weak iPhone 8 and 8 Plus sales.

The company is banking on iPhone X sales to drive revenues in the next quarter.

The company has witnessed declining market share in China.

Here’s the trading report on AAPL.

Apple shares rallied higher after the company opened pre-orders for the iPhone X on Friday October 26. The pre-orders for the iPhone X were quite high such that the initial stock allocated for the pre-sales was exhausted almost immediately the pre-sales opened.

The demand for the new iPhone X can be easily compared to the demand witnessed in 2014 when Apple launched the iPhone 6 and 6 Plus. These were the first iPhones to have larger screens, whose demand far outstripped supply in the first weeks.

The supply concerns raised by several analysts regarding the production of the iPhone X are likely to be resolved by the March quarter, which could lead to Apple registering significant growth over the September to March period.

Given that the iPhone X will go on sale during the holiday season, it is likely to generate more sales than previously recorded given the shopping frenzy that occurs during the holiday season.

Some analysts have also raised concerns regarding Apple’s falling market share in China, which was responsible for much of the growth reported by the company in international markets. It is important to make a clarification that most Chinese consumers cannot afford the iPhone as it is priced as a high-end product, hence, such consumers choose to buy lower-priced phones.

Overall, it is highly likely that the iPhone X shall register massive sales in the November to March period as it has unique features such as FaceID powered by its TrueDepth camera, its OLED screen and its edge-to-edge screen design. Other competitors such as Samsung could try to imitate the iPhone X features, but it is highly unlikely that they will succeed in the near future.

Therefore, it is highly likely that Apple will continue to dominate the global high-end smartphone market now and into the near future. The question remains whether the company is a good investment at its current valuation.

To find out more about where we believe Apple stock is going to go ahead of earnings, subscribe to our proactive investment newsletter. As a free trial member, you will have access to over 1300 real time stock trading reports full of actionable trading strategies.

Support and Resistance Plot Chart for

Real Time Updates for Repeat Institutional Readers:

Factset: Request User/Pass

Bloomberg, Reuters, Refinitiv, Zacks, or IB users: Access Here.