Apple Inc (NASDAQ: AAPL) saw a sharp increase in product demand amidst the Coronavirus pandemic, despite many predicting the opposite. The tech giant’s average revenue per user (ARPU) stood at about $273 in 2019 and is expected to print at more than $330 this year, representing an over 20% growth.
Rod Hall’s remarks on CNBC’s “Squawk on the Street”
Apple’s revenue growth, however, is likely to slow down in the long term, predicts Goldman Sachs’ Rod Hall. On CNBC’s “Squawk on the Street”, he said:
“We expect Apple’s ARPU to return close to the level seen in 2019. Not all the way back because the hybrid work/study model continues to keep the value of its products up. So, the ARPU will reverse but hang at a higher level than in 2019. That’s what our bottoms up model is predicting right now.”
In contrast, the consensus estimate is for Apple’s ARPU to slide only 3% to 4% from the current “inflated level”.
iPhone’s installed base is losing pace
According to the Goldman Sachs analyst, iPhone’s installed base is losing pace and could serve as a catalyst that reverses the growth in ARPU. After returning to a level close to but above that of 2019, he forecasts, Apple’s average revenue per user will stabilize and remain roughly flat in the subsequent years.
“I think the short term is very difficult to predict considering the COVID and economic uncertainty at large. But in the longer term, the next two to three years when we get through this, it is a reasonable assumption that Apple’s userbase growth is slowing and the ARPU will stabilize at some level, down from the current level,” he added.
Hall currently has a ‘neutral’ rating on Apple, shares of which are over 1.0% down on the intraday chart.
The post Goldman’s Hall expects Apple’s revenue growth to slow down in the long term appeared first on Invezz.
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