A record 85% of U.S. teens own an iPhone, a record 88% want one.
From a note to clients by analyst Harsh Kumar that landed on my desktop Wednesday:
Apple’s share of smartphone ownership increased in the Spring-20 Piper Sandler Taking Stock With Teens survey. Of the 5,200+ respondents, 85% have an iPhone, the highest percentage we have seen in our survey and up from 83% in the Spring-19 and Fall-19 surveys. In addition, iPhone may have room to move higher, with 88% of teens anticipating their next phone to be an iPhone. This metric is also the highest ever in our survey history and up from 86% over the past three surveys. Android was the runner-up with 8% of anticipated purchases, down from 10% in the Fall-19 survey. Apple Watch was the top smartwatch among teens, garnering 25% share, up from 20% in the Fall-19 survey. Overall, we view the survey results as a sign that Apple’s place as a dominant device brand among teens remains well intact…
We introduced an Apple AirPods ownership question in our Spring-20 survey, and of the 5,200+ respondents, 52% of teens noted they already own AirPods. In addition, 18% of respondents noted that they do not currently own the product but plan to buy them within the next 12 months. Overall, we believe the already strong attach rate and solid purchase intent demonstrates Apple’s ability to drive additional hardware growth outside of the company’s primary product set…
Overall, we believe results continue to suggest a strong preference for Apple products among American teens. We believe these trends remain important as the company looks to drive services revenue and complementary hardware products (like AirPods) in order to drive further revenue growth. In addition, while the premium smartphone market has largely become a mature market, we believe Apple’s ability to maintain and slightly grow its market share provides a solid base for a 5G product cycle refresh over the next few years.
Maintains Overweight rating and raise price target to $300 from $260.
Note: These are relatively well-heeled teens. They come from zip codes where the average household income is (or was) $65,600; a quarter come from zip codes averaging $103,800.
My take: This is the first Apple price target hike since COVID-19 hit.