What Apple Might Be Valued At If It Sold As Many Units As Samsung

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Year-To-Date Winners: We Have Found The Market And It's Apple

APPLE – THE BEST OPPORTUNITY EVER?

I SEE APPLE GOING BACK ABOVE $300, SOONER RATHER THAN LATER

Apple Inc. (NASDAQ: AAPL) and Samsung Electronic (OTC: SSNLF)’s famed rivalry in the smartphone arena continues. Though the former appeals to its audience with its feature-rich phones, which are aesthetically designed and are easy to use, the latter has strived all through to match its rival in every step.

Maintaining Its Lead Despite Note 7 Debacle

Samsung’s forte is its cost appeal, as it creates several models, each catering to different demographics of society. In 2016 alone, Samsung rolled out 31 models of smartphones from its stable compared to Apple’s three.

Despite its flagship Galaxy Note 7 fiasco, which transitorily generated negative sentiment, Samsung still sold 311.4 million smartphone units of in 2016 compared to Apple’s 215.4 million, giving Samsung a market share of 21.2 percent. Who knows what, if not for the Note 7 debacle, Samsung’s numbers would have been?

Benzinga looked at how Apple would have fared in terms of valuation if it had sold as many units of smartphones as Samsung did in 2016.

The analysis was done based on the following assumptions:

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  • Unit shipment figures for 2016 from IDC’s research.
  • The ASP of iPhone was taken from the most recent quarter for which data was available (fiscal year first quarter or calendar year fourth quarter).
  • Revenues of other product/service categories were taken from Apple’s fiscal year Q2, Q3 and Q4 of 2016 and fiscal year 2017 Q1. The corresponding quarterly numbers were summed up to get the calendar year 2016 figure. (This became essential because Apple’s fiscal year ends in September and the shipment data available from IDC pertained to the calendar year 2016).

iPhone Revenues 44% More With Samsung Shipment Numbers

Assuming Apple sold 311.4 million units (Samsung’s 2016 smartphone shipments) of iPhones instead of the 215.4 million it actually sold and applying an average selling price of $695 (the most recent quarterly statistics), the company would have generated annual revenues of $216.42 billion from the iPhone alone, roughly 44 percent more than it actually made.

Reconciled Calendar Year 2016 Revenues From Other Product Categories

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  • iPad: $19.08 billion.
  • Mac: $23.42 billion.
  • Services: $25.46 billion.
  • Other Products: $10.81 billion.

Arriving At Valuation

Apple’s calendar year 2016 revenues using Samsung’s smartphone units would have been $295.19 billion.

Applying a price to sales ratio of 3.46, valuation would have been $1,021.36 as opposed to $753.72 billion currently.

Under this hypothetical scenario, Apple would trade at $194.55 compared to its current market price of $144, suggesting 35 percent upside from current levels.

Is Apple’s think tank listening? A moot point, however, would be if Apple begins to focus on volume, and whether it can it do so without hurting margins and product quality.

Related Links:

New Data Show Why Smartphones May One Day Dethrone TV As The Supreme Screen

Unpacking Samsung’s UNPACKED Event: The Unveiling Of The New Galaxy S8

See more from Benzinga

© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.






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Oil Majors Can No Longer Ignore The Electric Car Threat

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A Survey Of My Side Of The Oil Patch

French oil major Total sees oil demand flattening out in the next decade and warns that electric vehicles are a big risk for the oil sector






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Why Did Google Pop And Amazon Drop Post Their Earnings Events?

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Year-To-Date Winners: We Have Found The Market And It's Apple

APPLE – THE BEST OPPORTUNITY EVER?

I SEE APPLE GOING BACK ABOVE $300, SOONER RATHER THAN LATER

Google and Amazon shares almost diverge out results last week






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Defense industry CEOs vent about ongoing budget mess in Washington

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My 2014 Best Performers, Looking Ahead To 2015

Top defense companies had first-quarter earnings calls this week and one common theme was management’s displeasure about the budget stalemate.






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Allow This New Drone Footage to Show You What Apple’s “Spaceship” Campus Looks Like Right Now

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Year-To-Date Winners: We Have Found The Market And It's Apple

APPLE – THE BEST OPPORTUNITY EVER?

I SEE APPLE GOING BACK ABOVE $300, SOONER RATHER THAN LATER

It’s almost show time for Apple’s (AAPL) new mind-blowing headquarters office. 

New footage (below) from drone videographer Matthew Roberts hit YouTube on Saturday revealing more progress on the site’s immense landscaping. 

The futuristic-looking headquarters will officially be known as “Apple Park” and was supposed to be ready to house employees beginning in April. Employees have not yet moved in, however. Construction will continue throughout the summer, while the relocation of 12,000 workers onto the campus will take over six months. 

The name of the 175-acre campus is in reference to the building replacing “miles of asphalt sprawl” with a “haven of green space,” as explained by Apple in February. In addition, the building will run entirely on renewable energy. 

The combination of “advanced” buildings with miles of greenery will provide a space for employees to be creative and to work closely together as a team, Apple chief design officer Jony Ive said. “[Steve Jobs] invested so much of his energy creating and supporting vital, creative environments,” Ive said. “We have approached the design, engineering and making of our new campus with the same enthusiasm and design principles that characterize our products.”

Apple has also announced that the new 1,000-seat auditorium on the campus will be named the Steve Jobs Theater. The building will feature a 20-foot-tall glass cylinder at its entrance and will sit on a hill overlooking meadows and the main building. 

“Steve’s vision for Apple stretched far beyond his time with us. He intended Apple Park to be the home of innovation for generations to come,” Apple CEO Tim Cook said in February. “The workspaces and parklands are designed to inspire our team as well as benefit the environment.”

The headquarters will include a visitors center with an Apple Store and a cafe open to the public, Apple said. 






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Microsoft Explains Why It’s Not Making Xbox Games Like ‘Breath of the Wild’ Or ‘Horizon Zero Dawn’

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My 2014 Best Performers, Looking Ahead To 2015

Xbox head Phil Spencer talks about the success of Zelda: Breath of the Wild and Horizon Zero Dawn, but also the risks of the story-driven, single-player game, which may indicate why Xbox has stayed away from the genre, for better or worse.






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qrvologo_large-e48896c3de1aee911d63d90fce99fe612fa8e048

iPhone 8 Could Bring Good News to Qorvo

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Year-To-Date Winners: We Have Found The Market And It's Apple

APPLE – THE BEST OPPORTUNITY EVER?

I SEE APPLE GOING BACK ABOVE $300, SOONER RATHER THAN LATER

Shares of semiconductor specialist Qorvo (NASDAQ:QRVO) have shot up roughly 35% this year, perhaps in part because of predictions that its place in the next iPhone could substantially boost its revenue. Investors seem to have forgotten that the chipmaker in February issued terrible guidance for the quarter that ended in March (its fourth quarter), possibly due to market share losses to Skyworks Solutions (NASDAQ: SWKS) that led to a revenue slowdown.

Metric Q4 2017 Estimate Q4 2016 Actual

Revenue

$610 million to $650 million $607.1 million
Gross margin 46% 50%
Diluted EPS $0.70 to $0.90 $1.04

Non-GAAP numbers.

Qorvo is set to report fourth-quarter results on May 3. Here’s what investors should expect from its upcoming earnings.

The headline numbers

Wall Street expects $0.81 per share in earnings from Qorvo on revenue of $631 million, in line with the company’s guidance. Analysts were originally expecting $719 million in revenue, but were forced to dial down expectations thanks to a delay in smartphone production by some of Qorvo’s key customers.

Qorvo's logo

Image source: Qorvo.

Qorvo’s earnings, however, are expected to decline from $1.04 per share in the prior-year period to $0.81 per share in the just-ended quarter, despite an improvement in its revenue. This isn’t surprising as the company expects its gross margin to drop 4 percentage points year-over-year, while operating expenses could go up 5% on a quarter-to-quarter basis.

Evidently, Qorvo is present a tough year-over-year comparison in its fourth-quarter report, though it should at least meet Wall Street expectations. Investors, however, will be more concerned with the outlook.

Gauging the outlook

It’s estimated that Qorvo gets a third of its revenue from Apple, though the company does not name its largest customer. The upcoming iPhone 8 has sparked lots of speculation and JPMorgan analyst Bill Peterson believes Qorvo will benefit from both higher dollar content in the next iPhone and stronger unit sales.

More specifically, Mizuho analysts forecast 120 million of the next iPhone in 2017 as compared to 89 million units of the previous generation, opening up a bigger revenue opportunity for Qorvo. It’s estimated that the company gained 8% dollar content in the previous iPhone, to $4 per unit, so similar chip content in the upcoming iPhone could boost its revenue by $124 million if the 120 million estimates proves true.

Qorvo’s outlook could be stronger if it manages to increase its chip content in the upcoming iPhone, which is estimated to possibly come out in September. But it faces stiff competition from Skyworks and has limited pricing power, so investors shouldn’t raise their hopes too much.

Meanwhile, Qorvo is going to supply chips to the North American version of the recently introduced Samsung Galaxy S8. This could be a big deal for the chipmaker, as Samsung was reportedly selling more units of the Galaxy S7 last year than the Apple flagship at that time.

Samsung has reportedly presold over 1 million Galaxy S8 units already, witnessing a 40% jump in preorders for its latest flagship as compared to the fiasco-ridden Note 7. The Korean smartphone giant believes that it can sell a total of 60 million units of the latest Galaxy twins, which should help Qorvo deliver a stronger outlook as the Galaxy S8 production ramp-up gathers momentum.

Analysts, however, aren’t too enthusiastic about Qorvo’s next-quarter guidance; they expect its revenue to remain flat year-over-year. But potentially strong sales of the latest Samsung flagship and iPhone builds this year could boost its outlook.

In fact, Qorvo management is quite confident that business will pick up dramatically in the second half of the fiscal year, helping it achieve double-digit growth despite a weak start. According to CEO Robert Bruggeworth, on the February earnings call [transcript via Seeking Alpha]:

… the impact of a few customer delays on revenue can’t dampen our enthusiasm for fiscal-year 2018. Qorvo has won significant share on these flagship programs and we expect to benefit as the programs roll out. Current expectations are for these builds to begin in March and hit significant volume in the June quarter.

Therefore, it won’t be surprising if Qorvo delivers a better-than-anticipated outlook for the coming quarter.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple and Skyworks Solutions. The Motley Fool has the following options: short August 2017 $87 calls on Skyworks Solutions and short August 2017 $85 puts on Skyworks Solutions. The Motley Fool has a disclosure policy.






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Apple Still the DJIA’s Best Performing Stock of 2017

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Year-To-Date Winners: We Have Found The Market And It's Apple

APPLE – THE BEST OPPORTUNITY EVER?

I SEE APPLE GOING BACK ABOVE $300, SOONER RATHER THAN LATER

Apple continues its streak as the best-performing stock among the 30 equities included in the Dow Jones Industrial Average. The company reports quarterly results on Tuesday.






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Verizon Drops Further, Continues as DJIA’s Worst Performing Stock for 2017

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Verizon shares fell to a new 52-week low on Friday and the stock continues to be the poorest performer among the 30 stocks that comprise the Dow Jones Industrial Average.






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