We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
After More Than a Decade of Insane Growth, Is Apple's Revenue Finally Plateauing?
Read MoreHide Full Article
Apple’s (AAPL - Free Report) outsized growth since the iPhone launched has seen it become the world’s most valuable company, worth more than Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) , and all the other tech giants. But nothing last forever, so let’s take a look at just how much Apple has grown since then, and see if these days are numbered.
Early iPhone Days
In the fourth quarter of 2006, the year before the iPhone debuted, Apple posted sales of $4.84 billion. Apple reported full-year revenues of $19.32 billion that year, well above its 2005 net sales of $13.93 billion.
Then everything changed after Steve Jobs introduced the first iPhone in 2007. Apple sold 1.1 million iPhones in Q4 that year, to bring the full-year total to 1.4 million. This helped boost full-year revenues to $24 billion. By 2008, Apple’s full-year sales reached $37.49 billion.
Next Decade
Just eight years ago, in 2010, Apple reported total sales of $65.23 billion. But things hadn’t really even taken off yet. One year later, the iPhone maker pulled in $108.25 billion, which marked a 66% jump from the year ago-period and a 677% surge from 2005.
In less than five years, Apple went from total sales of $24 billion to fourth quarter revenues of $28.27 billion. Apple’s sales then hit $182.79 billion in 2014 and climbed to $233.72 billion the following year.
Apple’s sales soared more than 510% over the last 10 years, as it racked up a total of $1.44 trillion in revenues. The company’s stock price clearly followed, but just looking at the chart is still somewhat mind-blowing.
However, over the last few years, Apple’s outsized growth has slowed substantially. In fact, Apple reported full-year 2017 revenues of $229.23 billion, which marked a decline from 2015.
Q1 2018
Apple’s Q1 revenues climbed just 13% to reach of $88.29 billion, with its flagship product accounting for 69.7% of total revenues. On top of that, at 77.32 million, iPhone unit sales came in nearly 2.5 million under our estimates. This miss not only occurred during the vitally important holiday quarter but also during the first full period that Apple’s new iPhone X was on the market.
Apple’s Services revenue, which includes Apple Music, Apple Pay, iTunes, AppleCare, and more, did surge 18% year over year to hit $8.47 billion. Services sales still only accounted for roughly 9.5% of total sales, but the segment expanded more quickly than iPhone, iPad, and Mac sales, while also generating more revenue than the latter two.
Outlook
Apple needs to boost sales outside of its iPhone business if the company hopes to continue to expand at a rapid pace, as the history of consumer electronics has proven that products rarely remain king forever—especially as the market becomes more saturated.
With that said, our current Zacks Consensus Estimate is calling for Apple to report revenues of $61.42 billion in the second quarter, which would mark 16% growth from the year-ago period. Meanwhile, Apple’s full-year revenues are expected to climb 13% to hit $259.54 billion. Investors should also note that Apple hopes to push Services revenues to $40 billion a year by 2020.
Bottom Line
Apple is clearly still projected to grow its top line at a strong rate for a company of its size and age. But it would seem that Apple’s days of 60% or even 30% growth are likely gone for good.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
After More Than a Decade of Insane Growth, Is Apple's Revenue Finally Plateauing?
Apple’s (AAPL - Free Report) outsized growth since the iPhone launched has seen it become the world’s most valuable company, worth more than Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) , and all the other tech giants. But nothing last forever, so let’s take a look at just how much Apple has grown since then, and see if these days are numbered.
Early iPhone Days
In the fourth quarter of 2006, the year before the iPhone debuted, Apple posted sales of $4.84 billion. Apple reported full-year revenues of $19.32 billion that year, well above its 2005 net sales of $13.93 billion.
Then everything changed after Steve Jobs introduced the first iPhone in 2007. Apple sold 1.1 million iPhones in Q4 that year, to bring the full-year total to 1.4 million. This helped boost full-year revenues to $24 billion. By 2008, Apple’s full-year sales reached $37.49 billion.
Next Decade
Just eight years ago, in 2010, Apple reported total sales of $65.23 billion. But things hadn’t really even taken off yet. One year later, the iPhone maker pulled in $108.25 billion, which marked a 66% jump from the year ago-period and a 677% surge from 2005.
In less than five years, Apple went from total sales of $24 billion to fourth quarter revenues of $28.27 billion. Apple’s sales then hit $182.79 billion in 2014 and climbed to $233.72 billion the following year.
Apple’s sales soared more than 510% over the last 10 years, as it racked up a total of $1.44 trillion in revenues. The company’s stock price clearly followed, but just looking at the chart is still somewhat mind-blowing.
However, over the last few years, Apple’s outsized growth has slowed substantially. In fact, Apple reported full-year 2017 revenues of $229.23 billion, which marked a decline from 2015.
Q1 2018
Apple’s Q1 revenues climbed just 13% to reach of $88.29 billion, with its flagship product accounting for 69.7% of total revenues. On top of that, at 77.32 million, iPhone unit sales came in nearly 2.5 million under our estimates. This miss not only occurred during the vitally important holiday quarter but also during the first full period that Apple’s new iPhone X was on the market.
Apple’s Services revenue, which includes Apple Music, Apple Pay, iTunes, AppleCare, and more, did surge 18% year over year to hit $8.47 billion. Services sales still only accounted for roughly 9.5% of total sales, but the segment expanded more quickly than iPhone, iPad, and Mac sales, while also generating more revenue than the latter two.
Outlook
Apple needs to boost sales outside of its iPhone business if the company hopes to continue to expand at a rapid pace, as the history of consumer electronics has proven that products rarely remain king forever—especially as the market becomes more saturated.
With that said, our current Zacks Consensus Estimate is calling for Apple to report revenues of $61.42 billion in the second quarter, which would mark 16% growth from the year-ago period. Meanwhile, Apple’s full-year revenues are expected to climb 13% to hit $259.54 billion. Investors should also note that Apple hopes to push Services revenues to $40 billion a year by 2020.
Bottom Line
Apple is clearly still projected to grow its top line at a strong rate for a company of its size and age. But it would seem that Apple’s days of 60% or even 30% growth are likely gone for good.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>