This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Why The iPhone is Bigger Than You Think

NEW YORK (TheStreet) It's no secret that Apple (AAPL) is increasingly becoming a one quarter company, generating a bigger portion of sales and profits during the holiday season than in any other quarter. What's not known, however, is just how big Apple's quarter was. Judging by some analysis on Wall Street, it could be much bigger than anyone imagined.

Canaccord Genuity analyst T. Michael Walkley, who rates Apple shares "buy" with a $600 price target, noted that his holiday surveys indicated "very strong iPhone 5s sales," and improved the supply level for all colors and sizes. Apple CEO Timothy D. Cook has said in the past that he was expecting an "iPad Christmas," but given the results of this survey and from others on Wall Street, the iPhone could top the iPad in revenue, units sold, and buzz created by a massive margin.

The smartphone market, particularly the high-end, is increasingly becoming a two horse race, with Apple going head-to-head with Samsung, which runs Google's (GOOG) Android operating system.

Other Android vendors, including Lenovo, ZTE, and others were "lacking the innovation to alter current market trends," Walkley noted, something that should bode well for Apple in the future. "We were disappointed with the lack of innovation from Android rivals at CES, and we believe a potential mid-year refresh for iPhone 6 and the upcoming larger-screen iPad position Apple for solid Y/Y F2014/15 sales growth," Walkley penned in his note.

(Full disclosure: I purchased a 16GB space grey iPhone 5s in December, and am loving every minute of it.)

Apple had a sluggish 2013 when it comes to sales growth, due largely to slowing iPhone sales and iPad growth, but Walkley expects that major innovation will happen in 2014, with the potential for a mid-year iPhone 6 launch. He also expects that Apple could release a larger version of its popular iPad tablet, rumored to be called the iPad Pro. As such, he's raised his 2014 and 2015 earnings estimates. He now expects Apple to earn $44.85 per share in 2014, up from $44.20, and $50.24 in 2015, up from $50.02 per share.

Analysts surveyed by Thomson Reuters expect Apple to earn $43.72 in fiscal 2014 and $47.88 in fiscal 2015.

The sluggish 2013 hurt Apple's share price, which had peaked past $700 in Sept. 2012 following the launch of the iPhone 5, and then struggled throughout 2013, amid concerns over lack of innovation and competition from companies such as Samsung.

AAPL ChartAAPL data by YCharts

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,156.85 +24.88 0.15%
S&P 500 2,001.57 +2.59 0.13%
NASDAQ 4,562.1890 +9.43 0.21%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs