BofA raises iPhone estimates despite Apple falling

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Apple (NASDAQ:AAPL) shares had a modest decrease on Thursday, despite an analyst from Bank of America who boosted his projections for iPhone sales and said he may have been overly conservative with his earlier forecasts. Wamsi Mohan raised his estimates for iPhone sales.

Mohan maintained his buy rating on Apple (AAPL), but decreased his price target to $200 per share from $215, and noted that the installed base of the iPhone for the firm is a “key signal” for its overall ecosystem. After all, with over 1.8 billion devices now in use, Mohan predicts that Apple’s (AAPL) services sector will generate more money in the future.

The installed base study shows that Mohan’s past iPhone predictions may be overly conservative, according to a research report from the firm. By raising his 2023 fiscal year iPhone shipment forecasts to 237 million units from 231 million, Mohan also boosted his 2024 fiscal year predictions to 230 million units from 222 million.

Also read: Training, certification, and licensing programs for iPhone, iPad, and Mac are now available from Apple

According to Mohan, the iPhone installed base in China accounts for around 20% of the total, which is comparable to the size of the European iPhone market. From 2021 through 2026, Mohan expects Apple’s (AAPL) installed base in China to rise by 5% annually. On the other hand, Mohan expects a low-single-digit growth rate for the iPhone in the United States and a 2% year-over-year growth rate for the iPhone in Europe.

The fact that Apple (AAPL) has nearly 2 billion devices in use worldwide and more than 825 million paid subscriptions suggests that there is “room for significant further penetration of services in the [installed base], which should help it avoid the fate of Nokia (NOK), BlackBerry (BB), and other once dominant mobile phone companies that faded over time, according to Mohan.

Apple (AAPL) reportedly postponed its plan to have its staff return to the office three times per week, citing an increase in COVID instances around the country on Tuesday.

Also read: Apple returned beloved iPhone and iPad features with the latest update

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