Apple earnings: Are cheaper iPhones on the horizon?

Apple earnings: Are cheaper iPhones on the horizon?

Apple is expected to record stronger earnings for its fiscal third quarter Tuesday amid growing revenue from services like iTunes and the App Store.

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The iPhone maker’s services revenue soared 31% to $9.19 billion in its second quarter, which ended March 31, easily beating Wall Street’s expectations. While that pace is likely unsustainable, Apple services will again show robust growth, according to analysts at CFRA.

“Services growth … is the single most important data point for investors,” CFRA analyst Angelo Zino wrote in a note to clients.

CFRA forecast services growth of 28% in the most recent quarter, largely thanks to the App Store, iCloud and Apple Music.

Investors are also closely watching Apple’s financial guidance for clues to its product plans and growth expectations.

Analysts see Apple introducing at least three iPhones in the fall, including devices that are priced more aggressively than the range-topping iPhone X. Zino believes a 6.1-inch LCD model will start at $699 to better compete in the competitive China market. KGI analyst Ming-Chi Kuo predicted a starting price as low as $550, according to CNET Opens a New Window. .

Zino also said the second-generation iPhone X will likely get a price cut to around $899, down from the current starting price of $999.

Despite softer iPhone sales than expected in the second quarter, the iPhone X continued to boost revenue from sales of Apple’s iconic smartphone lineup. Zino said Apple should be able to maintain elevated iPhone selling prices with a projected average of $736 in fiscal 2018. Stronger pricing will help offset a “no-growth environment” for the iPhone through fiscal 2020, according to CFRA’s forecast.

 

 

 

Source:- foxbusiness

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