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An Apple iPhone 7 in Bordeaux, France, February 1, 2017. (REGIS DUVIGNAU/REUTERS)
An Apple iPhone 7 in Bordeaux, France, February 1, 2017. (REGIS DUVIGNAU/REUTERS)

technology

Strong iPhone 7 sales set the stage for Apple’s next upgrade Add to ...

‘Things don’t have to change the world to be important,” Apple Inc. co-founder Steve Jobs said in an interview in 1996.

His words rang true, two decades later, as sales of the iPhone 7 and 7 Plus – similar in design to their predecessor – surpassed expectations to reinstate Apple as the world’s biggest smartphone seller after a five-year gap.

This has only built expectations, however, that the 10th-anniversary iPhone will need to offer revolutionary new features if it is to trigger a substantial uptick in sales.

“This is really the last [quarter] that anybody is going to care about iPhone until the launch this fall,” Cowen & Co. analysts wrote in a note. “It can be said that iPhone 7/7+ ‘did its job’ as a bridge to get to the supercycle in 2017.”

Apple’s shares rose 6.1 per cent to $128.75 (U.S.) on Wednesday, their highest in 18 months, a day after the company dethroned Samsung Electronics Co. Ltd. as the world’s top smartphone seller based on units shipped. Apple’s market capitalization is now $676.9-billion.

Apple sold 78.29 million iPhones in its fiscal first quarter ended Dec. 31, up from 74.78 million a year earlier. Analysts on average had expected sales of 77.42 million.

The sales reflected the first full quarter of iPhone 7 sales and come at a time when global demand for smartphones is slowing and cheaper Android alternatives are flooding the market.

Apple’s strong sales set the stage for the 10th-anniversary iPhone, which analysts say is expected to feature better touchscreen display, wireless charging and a shift to a higher-resolution OLED display.The company typically launches new iPhones in September.

Apple last saw a significant uptick in sales with the introduction of iPhone 6 in 2015.

At least 12 brokerages raised their price targets on Apple. Stifel Nicolaus & Co. and RBC Dominion Securities – the most bullish brokerages – raised their price targets by $15. No brokerage changed their rating on the stock.

Of the 48 analysts covering Apple’s stock, 39 have a “buy” rating or higher. Eight have a “hold” rating and one a “sell.” Their median price target is $139.

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