New iPhone 6 Could Send Apple Stock up 20% in 2014

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The chatter on tech blogs has heated up on reports of a significantly larger screen size for the upcoming iPhone 6 launch .  The smart phone is slated to be released this fall and industry insiders say the screen size will grow by 20% or more.

This has led Wall Street analysts to project that Apple (NASDAQ: AAPL ) will enjoy an earnings growth of 10-15% in addition to a marked increase in share price in 2014.

As you can see in the chart below, past release announcements have impacted share price dramatically.  The original iPhone, as well as the 4S (the model that first introduced Siri) both immediately propelled Apple stock upward.


new-iphone-6

Other iPhone offerings (3G, 3GS, 4) that only incrementally upgraded existing hardware have done nothing to increase Apple's share price.   But the larger screen size (rumored to be anywhere from 4.7 inches to 5.5 inches) for the iPhone 6 is a very big deal.

The current iPhone's 4 inch screen is dwarfed by smart phone competitors including Samsung and HTC.   Over the past few years many past Apple acolytes have jettisoned their iPhones for the larger screens of its Android competition.

Apple is now primed to steal these users back.  And current iPhone users, now for the first time in years, have a tantalizing reason to upgrade to the new model.

iPhones are expected to bring in 54% of total sales for Apple this year.

The iPhone already has a massive base of 260 million users and this screen size upgrade is seen by technology insiders as helping Apple to sell over 200 million new iPhones this year alone.

Since the death of Apple founder Steve Jobs, technological expansion at Apple has slowed .   Many insiders have hypothesized that lack of exciting new products and a less innovative corporate culture has caused this stagnation.

But the exciting new iPhone 6, along with rumors of an iWatch, and revamped Apple TV suggest a renaissance for Apple.

Although recent releases like the iPhone 5 and iPhone 5s have comparatively failed to entice users to upgrade from their current iPhone models, the new iPhone 6 stands to be the most successful entry ever.

Expectations of a subsidized price of $299 for the iPhone6, $100 more than the price for the iPhone 5s, fuel speculation that sales could add more than $3 a share in earnings upside during Apple's final two quarters in 2014. Apple is expected to use this revenue growth to increase its dividend for shareholders.

The new iPhone 6 is expected to debut this fall and could shoot Apple shares up 20%.  If you believe as I do that this new release is a sign of growth to come for Apple, than consider buying stock today.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

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