Apple's $26.5B in purchase commitments hint at huge 'iPhone 6s' launch

Posted:
in iPhone edited July 2015
Apple had $26.5 billion in off-balance sheet commitments at the end of the June quarter -- a massive year-over-year increase that suggests the company is planning for a record breaking launch of its next-generation "iPhone 6s."




Apple's purchase commitments were disclosed in the company's 10-Q filing this week, and highlighted by analyst Katy Huberty of Morgan Stanley. They represent a 26 percent year over year increase, and 15 percent sequential growth, despite tough comparisons.

To Huberty, these numbers suggest Apple is planning for year-over-year growth during the next iPhone cycle. Some on Wall Street have expressed concern that a so-called "iPhone 6s," with a design largely identical to the iPhone 6, might see slower growth.

Of the commitments, $22 billion were specifically related to outsourcing and components --?an increase of 41 percent year over year, and 14 percent from the previous quarter.

The commitments are to acquire components and capital assets, including product tooling and manufacturing process equipment. According to Huberty, these numbers have a strong correlation with the company's revenue for a coming quarter.

Extrapolating Apple's off-balance sheet commitments, Huberty said the number implies that revenue in the September quarter would be at $63 billion, though she cautioned that she believes the number for this particular quarter is "too high."

More realistic figures can be found in Apple's own guidance for the September quarter, as the company has projected its revenue will be between $49 billion and $51 billion. It was overinflated expectations for Apple's record setting June quarter that sent the stock down this week, as investors expected the company would sell more iPhones in the three-month period.

The tail end of the current September quarter is expected to feature the launch of the company's next-generation handset, known colloquially as the "iPhone 6s." In recent years, Apple has launched new iPhone models in late September, with a few days to go in its fourth fiscal quarter.

While it is expected to look much like the current iPhone 6 series, this year's iPhone upgrade is expected to have revamped internal components, including new screen technology that will allow pressure sensing Force Touch input. For more, see the AppleInsider feature Everything we know about the 'iPhone 6s' and '6s Plus'.

Comments

  • Reply 1 of 16
    mike1mike1 Posts: 1,522member
    "Apple had $26.5 billion in off-balance sheet commitments..."

    Bad use of a hyphen. Who does the proof reading here?
    Makes it sound like the sheet commitments were a little wobbly.
  • Reply 2 of 16
    roakeroake Posts: 486member
    Quote:
    Originally Posted by mike1 View Post



    "Apple had $26.5 billion in off-balance sheet commitments..."



    Bad use of a hyphen. Who does the proof reading here?

    Makes it sound like the sheet commitments were a little wobbly.


     

     

    Usage seems correct to me...

  • Reply 3 of 16
    joelsaltjoelsalt Posts: 827member
    Quote:

    Originally Posted by mike1 View Post



    "Apple had $26.5 billion in off-balance sheet commitments..."



    Bad use of a hyphen. Who does the proof reading here?

    Makes it sound like the sheet commitments were a little wobbly.



    Next time maybe a quick google before making an asinine statement?

     

    https://en.wikipedia.org/wiki/Off-balance-sheet

  • Reply 4 of 16
    slurpyslurpy Posts: 4,938member

    Here we go. Time to start raising expectations from now, so when Apple delivers another record crushing launch, they will still "miss". 

  • Reply 5 of 16
    phone-ui-guyphone-ui-guy Posts: 1,011member
    Quote:

    Originally Posted by joelsalt View Post

     
    Quote:
    Originally Posted by mike1 View Post



    "Apple had $26.5 billion in off-balance sheet commitments..."



    Bad use of a hyphen. Who does the proof reading here?

    Makes it sound like the sheet commitments were a little wobbly.



    Next time maybe a quick google before making an asinine statement?

     

    https://en.wikipedia.org/wiki/Off-balance-sheet


     

    Looks like they mean to use it as "off-balance sheet", but with the space between balance and sheet it does look incorrect.  

  • Reply 6 of 16
    slurpy wrote: »
    Here we go. Time to start raising expectations from now, so when Apple delivers another record crushing launch, they will still "miss". 

    Buy low, sell high. That's all you gotta do most of the time.
  • Reply 7 of 16
    phone-ui-guyphone-ui-guy Posts: 1,011member
    Quote:

    Originally Posted by Slurpy View Post

     

    Here we go. Time to start raising expectations from now, so when Apple delivers another record crushing launch, they will still "miss". 


     

    I agree with the general sentiment, but this is an analyst that is actually doing their job. Looking at these forward commitments is at least related to what Apple expects. 

  • Reply 8 of 16
    flaneurflaneur Posts: 4,432member
    Looks like they mean to use it as "off-balance sheet", but with the space between balance and sheet it does look incorrect.  

    That's right, ya gotta use both hyphens for it to work: "off-balance-sheet commitments." Not that unusual.
  • Reply 9 of 16

    Can't wait. I always upgrade on the "S" cycle.

  • Reply 10 of 16
    Perhaps this increase can also be related to new unreleased products too?
  • Reply 11 of 16
    Quote:

    Originally Posted by Flaneur View Post



    That's right, ya gotta use both hyphens for it to work: "off-balance-sheet commitments." Not that unusual.

    No, you don't.

     

    Although, it might have helped if they capitalized the B and the S.

  • Reply 12 of 16
    Quote:

    Originally Posted by AAPLfanboy View Post



    Perhaps this increase can also be related to new unreleased products too?

    I was thinking the same thing.  New round of iPads most likely.

  • Reply 13 of 16
    fallenjtfallenjt Posts: 3,661member
    Quote:

    Originally Posted by Suddenly Newton View Post





    Buy low, sell high. That's all you gotta do most of the time.

    Wow, it's good to know. No stock owner understands this...wow.

  • Reply 14 of 16
    Buy low, sell high. That's all you gotta do most of the time.
    A much better bit of wisdom would be to buy leading up to events and sell at/during events when the stock price goes down because the results didn't meet the sensationalised rumours/projections
  • Reply 15 of 16
    sog35 wrote: »
    really? thanks captain obvious

    You'd be surprised how many people practice: buy optimistically, sell in a panic.
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