Apple Has 93% of Mobile Profits; 650M Users by 2018, Says Canaccord (Tiernan Ray/Tech Trader Daily)

By Tiernan Ray Canaccord Genuity ’s Mike Walkley this morning raises his price target on shares of Apple ( AAPL ) to $145 from $135, writing that his review of market data suggests continued strength for the iPhone 6 upgrade cycle. Walkley writes that his assessment of vendor data in smartphones suggests, whose shares he rates a Buy, captured 93% of industry profits in Q4. Apple may have one third of all users of smartphones by the end of 2018, he reckons: We believe the strong iPhone 6 replacement sales should continue during C’15, as we estimate only 15% of the current estimated 404M iPhone installed base has upgraded to the new devices. We also anticipate continued strong share gains for the larger screen iPhones from high-tier Android smartphones during C’15 driving strong growth in the iPhone installed base and model the iPhone installed base growing to 487M subscribers exiting C’15 up 20% Y/Y. Longer term, we anticipate a gradually moderating rate of growth for the installed base from C’16 through C’18 and estimate 650M iPhone users exiting C’18. We note this base would only represent 1/3rd of an estimated 1.82B global premium smartphone subscribers anticipated by C’18. Finally, we anticipate steady long-term iPhone replacement sales within this growing iPhone installed base, and we believe this combined with our modest installed base growth expectations position Apple for steady sales of roughly 210M-215M iPhone units annually between C2015 to C2018. Walkley offers the following infographic to show Apple scooping up the vast majority of profit in mobile in Q4, while Samsung Electronics ( 005930KS ) has a minority of profit and all others operate at no profit or at a negative margin (click on the image to see it larger): Apple stock is off 14 cents at $118.79.

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Apple Has 93% of Mobile Profits; 650M Users by 2018, Says Canaccord (Tiernan Ray/Tech Trader Daily)

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