Apple Inc (NASDAQ:AAPL) is the world’s largest company by market capitalization. Therefore, it is only right that the company be diversified, and not be overly reliant on any single product in order to create long-term value in AAPL stock.
Yet, Business Insider published a report showing a decline in iPhone sales as a percent of total Apple revenue, and concluded that it’s important for Apple to “revive” iPhone sales.
That said, iPhone sales will be significantly higher in 2017 thanks to record sales of the iPhone 7, 7 Plus. Historically, “s” years underperform, and new generation phones show robust year-over-year growth.
Still, we consider it great news that the iPhone’s sales as a percent of total revenue has declined from a peak of 69% to 60% over the last two years. It suggests a better chance of long-term sustainability, with the company not over-reliant on any one product.
Furthermore, this is a trend that should last, even with accelerated iPhone sales growth in 2017.
That’s because Services has grown into a legitimate No. 2. During Apple’s last quarter, Services revenue grew 24% year-over-year, a pace we believe is sustainable throughout 2017.
Finally, iPad sales seem to have bottomed, and are poised for year-over-year growth.
2017 is the year of AAPL stock.
Currently, AAPL stock is sitting at new 52-week highs. Yes, AAPL stock is still 10% off its all-time high, but we believe Apple stock will create new highs in 2017 with room to spare.
In fact, such gains could happen sooner than later. (Below is data for members only that suggests Apple will blow away analyst expectations in the coming quarter)