Apple (AAPL) Should Take Page from BlackBerry (BBRY) Playbook . . . Really!
Tweet
Share
E-mail
Get Alerts AAPL Hot Sheet
Price: $168.96 +1.23%
Rating Summary:
39 Buy, 25 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
39 Buy, 25 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Join SI Premium – FREE
Apple (Nasdaq: AAPL) can drive earnings growth by following a strategy used by BlackBerry (Nasdaq: BBRY) in the past, thinks analyst Maynard Um of Wells Fargo. The strategy involves improved carrier penetration
"If Apple is able to increase its carriers by 100 (similar to BlackBerry's historical annual pace), we est it could add an incremental 31.5MM iPhones to FY2014 with every 5MM units equating to $1.04/share in EPS (not assuming an increase in units/carrier as BlackBerry saw)," said Um.
Um noted that Apple has 279 carrier relationships worldwide. In contrast, BBRY had 650 at one point near its peak.
"BBRY drove many of its relationships by offering bespoke plans and packages as it sought to increase the number of operators that offered its flagship Blackberry device . . .If Apple is able to achieve the same pace as BlackBerry in terms of new carrier adds, it could add roughly 100 in a given year. Using FY13 as the baseline for unit shipments per carrier (525k units), every incremental 100 operators Apple adds results in 52.5 incremental million units. If Apple is able to achieve this, we believe our estimates could prove to be conservative as we forecast 146.5mm units in FY13 and 167.2mm in FY14 – an increase of only 21mm units," concluded the analyst.
Wells Fargo reiterated an Outperform rating on Apple and raised its price target to $525-$575 (from $485-$525).
For an analyst ratings summary and ratings history on Apple (NASDAQ: AAPL) click here. For more ratings news on Apple click here.
Shares of Apple closed at $488.58 yesterday.
"If Apple is able to increase its carriers by 100 (similar to BlackBerry's historical annual pace), we est it could add an incremental 31.5MM iPhones to FY2014 with every 5MM units equating to $1.04/share in EPS (not assuming an increase in units/carrier as BlackBerry saw)," said Um.
Um noted that Apple has 279 carrier relationships worldwide. In contrast, BBRY had 650 at one point near its peak.
"BBRY drove many of its relationships by offering bespoke plans and packages as it sought to increase the number of operators that offered its flagship Blackberry device . . .If Apple is able to achieve the same pace as BlackBerry in terms of new carrier adds, it could add roughly 100 in a given year. Using FY13 as the baseline for unit shipments per carrier (525k units), every incremental 100 operators Apple adds results in 52.5 incremental million units. If Apple is able to achieve this, we believe our estimates could prove to be conservative as we forecast 146.5mm units in FY13 and 167.2mm in FY14 – an increase of only 21mm units," concluded the analyst.
Wells Fargo reiterated an Outperform rating on Apple and raised its price target to $525-$575 (from $485-$525).
For an analyst ratings summary and ratings history on Apple (NASDAQ: AAPL) click here. For more ratings news on Apple click here.
Shares of Apple closed at $488.58 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Enterprise Financial Services (EFSC) PT Lowered to $49 at Keefe, Bruyette & Woods
- Wells Fargo Upgrades Neurocrine Bio. (NBIX) to Overweight 'as the Company is Knocking on the Doors of the Large-Cap Club'
- Apple's June guidance will miss Street estimates - Barclays
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS View, Insiders' BlogRelated Entities
Earnings, Wells FargoSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
