Apple Looks To Capitalize On Samsung's Bad Press While Some Are Already Focusing On iPhone 8

BlueFin’s John Donovan believes Apple Inc. (NASDAQ: AAPL) has been “handed a gift-wrapped opportunity,” due to the Samsung (SAMSUNG ELECTRONIC KRW5000 (OTC: SSNLF)) Note 7 disaster.

Gift-Wrapped Opportunity

However, the analyst also mentioned that while the iPhone 7 is likely to be aided late in 2016 as Apple takes full advantage of Samsung’s “PR nightmare,” the company is clearly focused on the 10-year iPhone anniversary in 2017.

The iPhone CQ3 builds grew by 1 million to 46 million, with the upside to expectations being driven by the iPhone 7.

Related Link: Wells Fargo Downgrade Catches Apple Bulls Off Guard

For CQ4, iPhone builds have grown 2 million from August to 78 million, with the shipment estimate raised to 76 million. “Despite the build upside, it is unclear if a corresponding shipment increase is even possible this late in the quarter,” Donovan stated.

On the other hand, the 2016 iPhone totals are expected to shrink 9 percent to 210 million–211 million, with unit recovery expected in 2017, with expectations of minimal upside to the iPhone 6s Plus builds, with very little change expected to the SE builds.

Positive Long-Term Story

“We still like the AAPL story long term and while we monitor ongoing speculation for a somewhat weak upgrade cycle, our findings continue to show solid iPhone 7 builds as well as smartly reducing iPhone 6s inventories,” the analyst pointed out.

Donovan believes there could be room for Apple to appreciate as the company navigates toward its iPhone anniversary in 2017.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!