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Can the New iPhone Significantly Boost Apple’s Sales?


Sep. 10 2015, Updated 8:07 a.m. ET

Expected launch of the new iPhone

In the earlier parts of this series, we focused primarily on the Apple’s (AAPL) current situation as well as its future prospects in China—a significant growth market for the company. We mentioned that the iPhone dominates the company’s product mix. Apple is expected to launch its next model of the iPhone soon.

According to an August 28 CNN Money report, “Apple will hold a press event in San Francisco on Wednesday, September 9, at which it is widely expected to debut its new generation of iPhones.” The new version of the iPhone may help boost Apple’s sales, considering it has ample room to grow.

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The upgrade rate to iPhone 6 and iPhone 6 Plus

A low upgrade rate to iPhone 6 and iPhone 6 Plus gives ample growth opportunity for the new iPhone. According to Apple, a relatively small proportion of customers upgraded to iPhone 6 and iPhone 6 Plus. Plus, ~73% of the customers had not upgraded to these models as of July 21, 2015. The new iPhone may tap into this significant pool of potential customers. Apple may also leverage the relative popularity of iPhone in prospective smartphone customers.

A report by Fortune mentioned a survey conducted by ChangeWave of mostly North American customers. According to the survey, the number of potential customers who wanted to get a new smartphone in the next 90 days was higher for Apple than for other key smartphone companies in June 2015. These companies included Samsung (SSNLF), LG (LGEAF), and Blackberry (BBRY).

You can take a diversified exposure to Apple by investing in the PowerShares QQQ ETF (QQQ), which held ~13.3% in the company on July 31, 2015.


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