Apple (AAPL) fans are getting ready for what is possibly the biggest day in the tech giant’s calendar. Next week (Wednesday, September 7) will see the latest release for Apple’s flagship product – the iPhone 14.
Before anyone has even gotten their hands on the newest version, considering the headwinds at play, Wedbush’s Daniel Ives applauds the fact Apple is actually on time with its product release.
“Hitting this target launch with the supply chain issues and zero Covid shutdown seen earlier this year is another massive achievement for Cook & Co,” said the 5-star analyst. “We believe the initial order for 90 million iPhone 14 units out of the gates has stayed firm and will be roughly flat with iPhone 13 despite the macro storm clouds building.”
Ives reckons around 240 million of Apple’s 1 billion global iPhone userbase haven’t upgraded their handsets in over 3.5 years, so there should be plenty of demand for the new unit.
As for Apple’s expectations, Ives believes the company anticipates the “mix shift” will tilt heavily toward the iPhone Pro and Pro Max, which is good news for ASPs (average selling price).
Although the base iPhone’s price will remain the same, due to the increase in the price of components, in addition to the extra functionality of the latest version, a $100 price hike on the iPhone 14 Pro/Pro Max is likely in store.
So, spec wise, what’s on offer? “Enhanced” camera technology (48- megapixel), and according to Ives, the iPhone 14 Pro models will most probably boast the “innovative” A16 chip as more consumers choose to go Pro. Some storage increases are also expected for both the base iPhone 14 and Pro.
While Ives expects the difficult macro conditions to impact demand, the analyst believes that given the ongoing appeal of Apple products, the “baseline” for 220 million iPhone units in FY23 is most probably a “low bar.”
Down to business, then, what does it all mean for investors? Ives reiterated an Outperform (i.e., Buy) rating, backed by a $220 price target. This suggests shares have room for 34% growth in the year ahead. (To watch Ives’ track record, click here)
The Street’s average target is a more modest $183.12, indicating one-year upside potential of ~15%. However, like Ives, most analysts are backing Apple’s continued success; based on 22 Buys, 4 Holds and 1 Sell, the stock claims a Strong Buy consensus rating. (See Apple stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
