Apple continues to win market share of both units and revenue, says BofA – and the company even has an opportunity with buyers of used smartphones
Apple Inc. likely saw declining iPhone unit shipments over the last three years, but a BofA Securities analyst sees some silver linings.
The smartphone giant continues to win market share in terms of both industry revenue and units, in the view of BofA’s Wamsi Mohan. Additionally, Apple (AAPL) is having success in convincing people to pay for higher-priced iPhone models, a trend Mohan thinks could persist – and help to outweigh overall pressures in the company’s China business.
“We continue to see Apple ship more high-value units over time and thereby continue to take revenue share,” Mohan wrote. The company commands almost the entire market of devices that sell for at least $1,000, he added.
Used iPhones are becoming a greater portion of Apple’s overall installed base of smartphones – and Mohan sees an opportunity.
“We expect those who choose to buy used iPhones will slowly over time move to buy new iPhones and those that buy new iPhones will keep up with the iPhone refresh cycle of approximately every four years,” he noted.
Plus, even those who opt to buy used iPhones from third parties still contribute to Apple’s coffers. Services revenue per device in Apple’s installed base reached $73.01 last year from $50.59 in 2019, and Mohan expects a further move higher.
Mohan continues to rate Apple shares at buy, and his $225 price target implies roughly 30% upside from current levels.
His optimism comes as overall sentiment toward Apple’s stock remains depressed. Shares are down about 10% to start the year, while the S&P 500 SPX is up 8%.
Still, Wall Street analysts remain largely bullish, as 25 of the 43 who are tracked by FactSet hold bullish ratings. Apple bulls see various catalysts ahead, including a greater push into generative artificial intelligence and the company’s annual update on its capital-allocation program.