Apple’s (NASDAQ:AAPL) iPhone sales rebounded in the second quarter of fiscal 2023 (ended April 1, 2023) and helped the company beat analysts’ expectations. After declining 8% in the December quarter due to production disruptions in China, iPhone revenue increased 1.5% year-over-year to $51.3 billion in the March quarter.
iPhone Sales Rebound in March Quarter
It’s worth noting that iPhone sales increased in the March quarter despite a 15% decline in global smartphone shipments, as per IDC estimates.
During the Q2 earnings call, Apple CEO Tim Cook said, “The iPhone 14 and 14 plus continue to delight users with their long lasting battery and advanced camera.” Further, CFO Luca Maestri highlighted that the latest survey of U.S. consumers by 451 Research revealed 99% customer satisfaction for the iPhone 14 family.
Additionally, iPhone’s active installed base rose to a “new all-time high,” with growth experienced across all geographic segments. The company boasts an iPhone base of “well over” $1 billion active devices, reflecting customer satisfaction and growing loyalty.
In particular, iPhone witnessed solid demand in several developed and emerging markets in South Asia, Latin America, and the Middle East. March quarter iPhone sales doubled on a year-over-year basis in India, Indonesia, Turkey, and the UAE.
CEO Cook opened two retail stores in India in April and said that the company intends to expand its operations in the country. Cook stated that he was delighted to see the enthusiasm for the Apple brand in India. “There are a lot of people coming into the middle class, and I really feel that India is at a tipping point, and it’s great to be there,” he added.
While iPhone sales improved and surpassed analysts’ estimate of $48.8 billion in the fiscal second quarter, the company’s overall sales declined 2.5% to $94.8 billion due to lower iPad and Mac sales amid macro challenges and currency headwinds.
Is Apple a Good Stock to Buy?
Following the results on Thursday, Goldman Sachs analyst Michael Ng reiterated a Buy rating on AAPL stock and raised the price target to $209 from $200. The analyst believes that given Apple’s low iPhone market share in developing markets (for instance, 3% in India and less than 1% in Indonesia), the company’s success in these markets could drive its revenue and installed base growth in the years ahead.
The analyst is also upbeat about Apple’s Services business and sees it as a “reliable source” of long-term growth. Further, he noted that the company’s “generous” shareholder capital return program continues to drive the stock.
Overall, Wall Street’s Strong Buy consensus rating for Apple is based on 21 Buys, three Holds, and one Sell. The average price target of $176.05 suggests 6.2% upside. Shares have advanced over 27% year-to-date.