Why Apple Will Continue To Beat Street Expectations

Apple Inc. (NASDAQ: AAPL) yet again came out with better-than-expected quarterly results. Revenue for the quarter came in at $40.3 billion, above estimates of $36.8 billion, while EPS came at $2.33, again above estimates of $2.15.

The core product of the company, the iPhone, saw a massive 55 percent year-over-year sales increase that, according to many analysts, is due to the strong demand of iPhone 6 and iPhone 6 Plus in China.

David Garrity, principal at GVA Research, was on CNBC following Apple's results to discuss the advantages that Apple can bank on.

Better User Experience

"I think we are in a situation here where if we look at China, you are seeing a great move away from the large, form-factor phones that had Android operating systems," Garrity said.

"Apple operating system basically offers a better user experience."

Related Link: Apple Catalysts Out Of Steam, Says Nomura

Strong Upgrade Cycle

He continued, "The other advantage that there is for Apple, we think, is that certainly you have the advantages of these iPhones 6s that are being sold out to potentially tie along with them Apple Watch sales going forward.

"So, from that standpoint, we think we are in the midst of a very strong upgrade cycle around iPhone 6."

Broadening Product Portfolio

"We are also going to be seeing a broadening of the product portfolio with the Apple Watch. Granted, there may be some concerns as to whether the supply chain can actually fill those orders," Garrity cautioned.

"But, the indications that have been heard is [sic.] that they are basically ramping up in terms of the supply chain to produce more than 20 million units over the course of 2015," Garrity concluded.

 
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