uploads///Apple iPhone Sales Saw a YoY Growth in Fiscal Q

Why Apple’s iPhone Revenues Missed Wall Street Expectations

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Aug. 3 2017, Published 12:38 p.m. ET

iPhone shipments rose YoY in fiscal 3Q17

Shipments of Apple’s (AAPL) iPhone rose 1.6% YoY (year-over-year) to 41.03 million against Wall Street expectations of 40.7 million. While iPhone unit sales growth has been sluggish lately, iPhone’s revenue growth has been robust. Higher 3Q17 iPhone sales suggest that iPhone lovers are possibly less inclined to delay buying one until a next model is launched.

Apple’s iPhone revenues represented 54.7% of the company’s fiscal 3Q17 revenues. iPhone revenues in 2Q17 represented 62.8% of its 2Q17 revenues. The resurgence in iPad and Mac sales and the growth in Apple’s service revenues explain the decline in the company’s dependence on iPhones in 3Q17.

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Apple’s iPhone revenues have risen 7.2% YoY, and 3Q17 was the third consecutive quarter in which the company has seen positive YoY revenue growth for iPhones. However, a lower average price of $606 caused iPhone revenues to fall to $24.8 billion, well below Wall Street expectations of $25.5 billion. Analysts expected iPhone’s average selling price to come in at $621.

Why iPhone 8 sales are critical for Apple

As mentioned in the previous part, iPhone shipments tend to be sluggish during the company’s third fiscal quarter as customers anticipate Apple’s newest iPhones. The iPhone 8 could be released this fall, possibly in September. Apple is expected to launch the iPhone 7s and iPhone 7s Plus with the iPhone 8.

The iPhone 8 is expected to have a higher-resolution OLED (organic light-emitting diode) display along with advanced touchscreen technology and wireless charging. However, the phone is likely to come with a $1,000–$1,400 price tag.

Consumers have been delaying the purchase of iPhones. The iPhone 7 did little to excite consumers. Apple stock has risen 41.0% in the last 12 months since investors are expecting the iPhone 8 to be a hit.

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