Apple Inc. (NASDAQ:AAPL) growth hasn’t left yet, despite what many analysts are saying about the maturity of the iPhone as a business and the lack of growth in the company’s other business segments. Tim Cook and Co. still have quite a few tricks up their sleeves as 2015 wears on, and the Apple Watch is least among them.
Leveraging a platform
What Apple has created is a platform that mirrors those operated by companies like Google and Facebook. The major difference is that it’s a physical item and it sits in the pocket of its users. Apple can leverage the iPhone to enter any business under the sun, and it’s already doing so with the start of Apple Pay and the company’s Beats Music streaming service.
According to Tim Arcuri of Cowen & Company Apple is indeed going to have trouble growing the iPhone business beyond the tremendous cycle that the iPhone 6 brought. Kulbinder Gurcha of Credit Suisse isn’t pricing profits from services like Apple Pay, HomeKit, HealthKit, or Beats Music into his estimates for the Cupertino company, but he recognizes that may be erring on the side of conservatism.
Growth will need to come from that area if Apple is to keep up anything like it’s current growth rate. It appears a slowdown is already priced into the company’s stock, however, so investors may not be too worried if there is significant deceleration when the iPhone 6s and the iPhone 7 hit the shelves.
Apple value reaches a top
Apple Inc. (NASDAQ: AAPL) shares traded to all time highs after the company released its earnings numbers for the first three months of the year on Monday afternoon. with some analysts predicting that Apple will make a run the whole way to a $1 trillion valuation, it’s clear that there’s still quite a lot of growth expected from the Cupertino team.
The idea that Apple iPhone sales have reached a top has been spouted before, but this time analysts are seemingly struggling to come up with a way for Cupertino to drive sales ever-higher. It’s not that the iPhone will be in decline from now on, it’s that sales will decelerate as Abhey Lamba of Mizuho wrote in his report on Apple earnings.
Apple growth may rely on the company leveraging its business as a platform. The Services segment brought in around $5 billion in the first quarter, less than a twelfth of total revenue. Luca Maestri, the company’s CFO, will be working with product managers and CEO Tim Cook on bringing those changes about and keep Apple growth on track.