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  • Apple's Off-Balance Sheet Commitments Point Toward a Large Next-Gen iPhone Launch

    Apple recently made $26.5 billion in off-balance sheet commitments at the end of the June quarter suggesting that the company is planning for another record-braking launch of its next-generation iPhone, likely to be dubbed the “iPhone 6s.” The purchase commitments were all disclosed in the company’s 10-Q filing this week and highlighted by Morgan Stanley analyst Katy Huberty. These commitments ended up representing a 26% year-over-year increase and 15% sequential growth despite the tough comparisons.

    These numbers suggest that Apple is planning for year-over-year growth during the next iPhone cycle. Speculation from Wall Street points to concern that a so-called “iPhone 6s,” with a design that is likely similar to that of the iPhone 6 may see slower growth considering it is a slight upgrade as opposed to a new generation model.

    When it comes to the commitments, $22 billion of the total amount was specifically said to be related to the outsourcing and components, an increase of 41% year-over-year and 14% from the previous quarter. As part of the commitments, Apple is said to acquire components and capital assets including product tooling and manufacturing process equipment. Huberty claims these numbers have a strong correlation with the company’s revenue for the upcoming quarter.

    Based off the commitments from Apple’s off-balance sheet, Huberty says that the numbers imply that revenue in the September quarter would be at $63 billion, though she cautioned that she believes the number for this particular quarter are “too high.” More realistic figures can be found in Apple’s own guidance for the September quarter as the company projected its revenue will be between $49 billion and $51 billion. It was overinflated expectations for Apple’s record setting June quarter that sent the stock down this week, as investors expected the company would sell more iPhones in the three-month period.

    Although it’s expected to look much like the current iPhone 6 series, this year’s iPhone upgrade is expected to have revamped internal components including new screen technology that will allow pressure sensing Force Touch input.

    We’ll have to wait and see how things turn out.

    Source: Morgan Stanley via AppleInsider
    This article was originally published in forum thread: Apple's Off-Balance Sheet Commitments Point Toward a Large Next-Gen iPhone Launch started by Akshay Masand View original post