The iPhone 14 Pro is so powerful that one analyst believes there may be a stock issue in the holiday season.
Apple (stock ticker: APPL) launched the iPhone 14 for sale in stores on September 16, along with other new products like the Apple Watch Series 8. The new iPhone is available in four different models: the basic iPhone 14, iPhone 14 Plus, iPhone 14 Pro, and iPhone 14 Pro Max. It has only been a few days since the release, and the demand has been strong for the phone, specifically the high-end models iPhone 14 Pro and Pro Max.
“The iPhone 14 Pro is significantly more popular than the iPhone 13 Pro, relative to customer choice,” said Dan Ives, analyst at Wedbush. Baron Tuesday. “We’ve seen a lot more customers with the iPhone 13 move to the base model, versus what we’re seeing today leaning very strongly toward 14.” He valued Apple stock at Outperform with a $220 target price.
This was a happy surprise for the company. Given the current macroeconomic background, “there was an idea that [Apple] She was going to have a demand problem, not a display problem. Currently, [Apple] “It has the opposite of what many think they will get,” the analyst said.
Conversely, Ives means the company could run into supply issues for customers looking to buy the phones as gifts heading into the holiday season, leading to early purchases.
“At this pace, there will be minimum stock in Apple stores or on the website by mid-November,” Ives said. “So Apple has to significantly increase the supply of professionals over the next three to four weeks to start meeting what could be a huge demand during the holidays.”
The popularity of high-end phones is surprising at a time when many people are experiencing record-high inflation, but that hasn’t stopped shoppers from buying the $1,000 iPhone Pro. Ives said that one of the reasons for this is due to developments in the iPhone 14 Pro models compared to the base model, such as the improved camera. He also said that a lot of users were too late for the iPhone upgrade to begin, and the carriers’ promotions were enough incentive to make the move.
“Based on our estimates, 240 million of the 1 billion iPhone users worldwide have not upgraded in over 38 months. So there is a lot of pent-up demand just in terms of overall upgrade.”
Because of the carriers such as
T-Mobile United States
(TMUS) which offers swap promotions, Ives said that “Finally, it makes more sense to go the Pro route than the base model. The route of least resistance when you put all the promotions together is to use the Pro model.”
Overall, Ives sees consumer excitement about the new iPhone 14 Pro being positive for the company and possibly for the stock.
“Technology is still under tremendous pressure due to Federal Reserve rates and risk, but I think this would hold up to Apple much better than other tech names and the broader market if this demand story continues, which we think it will,” he said.
Apple stock rose 1% on Tuesday to $155.95 while stock
Standard & Poor’s 500
It decreased by 1.5%. The stock is down about 12% so far this year, but is up 2.4% since the close on September 15, the day before the iPhone 14 release date.
Write to Angela Palumbo at email@example.com
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