Apple’s Sales Forecast Indicates Another Record Holiday Quarter

28 Oct 2015 | Author: | No comments yet »

Apple Extends Mobile Wallet Foray to Canada, Australia.

The giant tech company reported quarterly earnings Tuesday that beat analysts’ estimates, while forecasting healthy iPhone sales during the upcoming holidays. SAN FRANCISCO – Apple reported higher-than-expected quarterly revenue and profit, boosted by iPhone sales, and issued an outlook that Wall Street interpreted as a sign of solid demand for its latest iPhone 6s and 6s Plus models.

Apple Inc. is joining with American Express Co. to bring its mobile wallet system to Canada and Australia in the latest test of the technology giant’s mission to expand in the global payments industry. The world’s largest company by market value said on Tuesday that it sold about 48.05 million iPhones in the fourth quarter, slightly below analysts’ average forecast of 48.72 million, according to a poll by Fortune magazine. Starting this year, the two countries will join the U.S. and U.K. in getting Apple Pay, which lets iPhone users make purchases by tapping their phones on merchant terminals, Chief Executive Officer Tim Cook said during a conference call Tuesday. And in a closely watched indicator, Apple issued a forecast for the upcoming December quarter that suggests it will slightly surpass last year’s record of 74.5 million iPhones sold during the crucial holiday season.

Apple reported $11.1 billion in net income for the quarter ended Sept. 26, up 30 percent from a year earlier, while sales rose 22 percent to $51.5 billion. In an interview with Reuters, Chief Financial Officer Luca Maestri said Apple was seeing no signs of a slowdown in that market, despite some economic turmoil. “We continue to have wonderful success there,” he said, adding that Apple now has 25 stores in the country and is opening a new one roughly every month. For the current quarter, which will include a full three months of sales of the new iPhones, Apple forecast revenue between $75.5 billion and $77.5 billion. Currently, mobile-wallet transactions are limited to Android and BlackBerry devices, leaving out the 40 percent of Canadians who have an iPhone, according to ComScore Inc. Apple Pay will have a “meaningful role, but hardly a transformational one in Canada,” Rob Sedran, a CIBC World Markets bank analyst, wrote in an Oct. 21 note.

We’re very proud of that number.” There are more than 1 billion Android users in the world, Google CEO Sundar Pichai revealed at the company’s annual I/O developers conference in May. Morningstar analyst Brian Colello said the forecast was slightly below expectations but investors were pricing in a worse outcome, which was why the stock rose after hours. Assuming Apple captures 10 basis points per transaction, of roughly 150 basis points, and a 30 percent share of card transactions, the earnings impact would be immaterial for the sector in the near to medium term, he said. While Android users have a wider selection of hardware at varying price points to choose from, Apple just made it more affordable to buy an iPhone up front with its iPhone Upgrade Program. Cormark Securities Inc. analyst Meny Grauman said in July that Apple’s entrance probably won’t hurt earnings at Canadian banks, even if it captures a quarter of the country’s payments volume.

In the U.S., carriers like Sprint and T-Mobile also raced to the bottom in an effort to convince people to buy iPhones from them for as low as $1 a month. The top six banks would see annual profit slip by less than 1 percent if Apple grows to 25 percent of the market and charges interchange fees of 15 basis points, Grauman said. And, of course, Apple is happy to help Android users painlessly join the iOS ecosystem with its relatively new Move to iOS app for Android, which transfers an Android phone’s data to a new iPhone. Apple’s shares, which fell steeply in mid-August as concerns about the company’s business in China hit fever pitch, were trading at $114.95 after the bell.

Toronto Dominion Bank’s UGO has signed up more than 100,000 users since debuting in December and Suretap, developed by Rogers Communications Inc., has 180,000. Overall smartphone sales are slowing around the world, as most consumers in developed nations already have one. iPhone sales skyrocketed last year after Apple introduced new models with bigger screens in September 2014.

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