Clearly, they aren't going to hit $25 a share for quarterly earnings this quarter, I doubt they will even match last quarter. But, they should be able to set new quarterly earnings mark in June, with the addition of China's second wireless carrier.
The way I see it, Apple earns an extra $3 billion for every $10 billion in revenues. At $46 billion, they made about $14 in EPS. At $56 billion, they should earn north of $17 per share. At $66 billion, they should earn north of $20 per share.
In order for Apple to gain $10 billion in revenues, they need to sell an extra 16 million iPhones.
If they sell 53 million iPhones in a quarter, that should get them to $56 billion revenue.
If they sell 70 million iPhones in a quarter, that should get them to $66 billion revenue.
Nokia and Samsung are each selling north of 70 million cell phones per quarter. The main difference between Nokia or Samsung vs Apple is that Apple only has contracts with 30% of the global wireless companies. There is plenty of room for Apple to still double it's market share.
Next quarter, Apple will be selling to China Unicom and China Telecom. Hopefully, that will push Apple past the 40 million mark for the quarter. Once they add in companies like China Mobile and Japan's DoCoMo later this year, that should push them towards the 50 million mark. At that point, Apple is closing in on $70 a share in annualized earnings.
What's to stop them from growing to $25 a share once the next iPhone is launched? Once they launch an iPhone 5, most of the global carriers should be on board. If they aren't on board with the iPhone 4S, they will certainly jump on board for the iPhone 5. That will drive another year of sequential growth in 2013. The biggest question for Apple this year will be whether or not the iPhone 5 comes out next fall.
Personally, I wouldn't be shocked if iPhone 5 doesn't come out until 2013. LTE networks are only available in handful of markets in the US right now. It doesn't make any sense to sell the iPhone 5 before the LTE networks cover the majority of US markets. Plus, it gives wireless carriers more time to recoup the costs of their iPhone 4S handsets. |
