Ives says that demand for iPhone 13 series phones is outstripping supply by 15%
Wedbush analyst Ives says demand for iPhone 13 phones is 15% higher than the supply
In his note, Ives wrote, “Despite the chip shortage and Rubik’s Cube logistics that Apple (and every other technology, auto, and retail vendor) is dealing with we are seeing tremendous demand trends both in the US and China for iPhone 13 which is a positive sign that Apple could exceed selling 80 million iPhone units in the quarter with stronger Pro versions driving higher ASPs.” The average selling price (ASP) is an important metric since it gives the company and analysts an idea of whether the more expensive Pro models are in demand.
As 5G becomes more available, owners of older iPhone models will be ready to upgrade
Obstacles in the way including the global chip shortage and the minefields in the supply chain are but road bumps in a supercycle that will run for a few years. The large number of active iPhone owners with older models provide a floor for iPhone sales, especially as faster 5G signals become more and more readily available not just in the states, but worldwide. Ives’ note mentions that in China, there have been an estimated 15 million upgrades to iPhone 13 which would appear to be a positive sign for demand moving toward 2022.
With Apple shares currently trading at $151, the analyst has a price target of $185 which would require a hike of 22.5% from the current stock price. He calculates this by taking the valuations that Wedbush analysts have placed on different parts of Apple’s businesses. For example, Apple’s Services unit is valued at $1.3 trillion based on a multiple of 16 times revenue. Apple’s hardware business is given a valuation of $2.1 billion using a lower multiple of 7.
