Apple shares hit record close on optimism for next iPhone

[SAN FRANCISCO] Apple Inc shares hit a record on optimism the next iPhone will drive a resurgence in sales and help the company's services businesses grow.

The stock climbed less than 1 per cent to US$133.29 at the close in New York, the highest on record. The increase valued Apple at about US$699 billion, making it the world's most highly capitalised company. Google parent Alphabet Inc is next at US$573 billion, according to data compiled by Bloomberg.

Analysts are predicting a further gain in Apple shares in the next year, based on the average 12-month target price of US$142.58, according to data compiled by Bloomberg.

The intraday peak for the shares is US$134.54, set in April 2015. The previous closing record was US$133 in February of that year. The stock then dropped for more than a year on concern about waning smartphone industry growth and Apple's prospects beyond the iPhone. However, the company recently reported stronger-than-expected iPhone sales during the key holiday quarter, helping the stock reach a new high.

While the iPhone 7, introduced in September, failed to convince as many existing customers to upgrade as its predecessor did, it succeeded in attracting new smartphone buyers to the Cupertino, California-based company. That bodes well for the next iPhone later this year, which is expected to be a more substantial upgrade, according to analysts.

"We believe Apple will extend its leading market share of the premium-tier smartphone market installed base during 2017," Canaccord Genuity analyst Michael Walkley wrote in a Feb 7 note to investors.

BLOOMBERG