Apple on track to become first trillion dollar company

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‍Apple Inc. is on track to become the first trillion-dollar company on the global stock market, according to RBC Capital.

Analysts from the investment bank released their predictions on Tuesday citing that Apple’s latest iPhone release will set the company’s stock up for the necessary gain.

"From a near-term perspective, we would note historically AAPL stock has done rather well into product launches with median return 90 days prior to launch at 15.6 percent (median outperformance vs. S&P 500 at 10.9 percent). This, we think, sets up AAPL well heading into the product cycle this time around," analysts said.

Apple hasn't had an easy ride in China. /AFP Photo

According to reports, Apple plans to release three iPhones later this year. Two of the three are expected to be more expensive compared to previous versions.

Earlier this year, analyst firm Goldman Sachs estimated that Apple's margins will receive a middling to substantial boost of between 2 and 6.3 percent from the "hardware premiumization" trend.

Apple of China’s eye?

Apple has reported disappointing sales in China in recent quarters. Most analysts believe that this is because the company is viewed as another smartphone hardware company here and is facing tough competition from cheaper smartphones made by domestic companies such as Huawei and Xiaomi.

Customers scramble to get their hands on the new iPhone 7 at an Apple store in Shanghai. /AFP Photo

However, Apple is reportedly changing its strategy and boosting its presence in the smartphone services market in China. It has discontinued services and removed offensive apps from its iTunes store. Apple has also invested in research and development centers in China and bowed to requests from the Chinese government.

And the results are showing. Even as revenue from its hardware sales in the region declined, the company reported that sales from China's App Store exceeded those of its US counterpart in the past quarter.

The analysts attributed Apple's future growth to strong gross margin performance and better trends in the Chinese mainland. RBC Capital has set a time frame of 12-18 months for Apple to reach the 1 trillion US dollar valuation. In an interview earlier this year with CNBC, Warren Buffett similarly voted for Apple to reach the trillion-dollar milestone soon.

Buying and selling the iPhone 7 on the the day of release in Hong Kong. /AFP Photo

One rotten Apple can spoil the bunch

Apple is facing accusations of anti-competitive behavior in China, one of its largest iPhone markets, adding to the tech giant’s regulatory problems in the US and Europe.

The case filed with Chinese regulators alleges that Apple is abusing its control of the iOS App Store to mistreat Chinese app developers by removing their apps without good reason and levying a high charge for in-app purchases.

Lin Wei, a lawyer at the Beijing-based law firm Dare & Sure, that brought the case against Apple on Tuesday representing 28 developers said, “[Apple founder] Steve Jobs represented the American dream. But Apple’s unequal treatment of China’s young developers stops them from realizing their China dream.”