How long can Apple depend on iPhone sales?
Apple had a very good quarter — make that a great quarter. The company announced it made $18 billion in profit for the first quarter of its fiscal year, ending in December. Much of that profit was thanks to the popularity of the iPhone, especially in China, where iPhone sales doubled year over year.
But does that strength belie a potential weakness?
“The iPhone 6 was a great success, but how long can it last and what’s going to be the follow up?” asks Michael Obuchowski, an Apple shareholder and portfolio manager of Concert Wealth Management. Even though earnings this quarter were strong, Obuchowski says it worries him that 70 percent of revenues were driven by a single product line: iPhones.
Companies that generate most of their sales from one product can be risky, says J.P. Eggers, a professor at NYU’s Stern School of Business. But he thinks Apple’s narrow focus is a source of strength, because the company can work on innovating and improving a narrow range of products.
Ramon Llamas, research manager for IDC’s wearable and mobile phones programs, cautions against betting against Apple, noting that the company’s had long history of success in product development.
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