Rumors have it that Apple has ordered up 75 to 80 million 5G iPhones, up from 65 to 70 million earlier this summer.
From a note to clients by Wedbush’s Daniel Ives that landed on my desktop Tuesday:
Apple just announced its much anticipated iPhone 12 launch will kick off on October 13th virtually with the phones set to hit the shelves/website in late October. Across the board we are seeing an uptick around production and pent up demand for the slate of iPhone 12 models (expecting 4 new models) set to be unveiled next week in this launch event. In particular we are seeing Apple and its Asian suppliers anticipate stepped-up demand for the larger 6.7-inch model which is raising the overall iPhone 12 expectations heading into this “once in a decade” potential launch. We continue to believe the line in the sand a few months ago was between 65 million to 70 million 5G iPhone 12 units and now has moved into the 75 million + range with 80 million a stretch goal. Importantly, with our estimation that 350 million of 950 million iPhones worldwide are currently in the window of an upgrade opportunity, we believe this will translate into an unprecedented upgrade cycle for Cook & Co.
China demand a linchpin to Apple’s 5G supercycle. China remains a key ingredient in Apple’s recipe for success as we estimate roughly 20% of iPhone upgrades will be coming from this region over the coming year. To this point we are seeing considerable strength from the China region over the last few months with positive trends heading into the Fall, an impressive trajectory we expect to continue heading into the next 6 to 9 months. Despite the noise, based on our recent discussions with contacts within the Beltway we strongly believe the WeChat ban will not negatively impact or disrupt Apple’s iPhone ecosystem within the key China market.
Taking a step back we believe iPhone 12 represents the most significant product cycle for Cook & Co. since iPhone 6 in 2014 and will be another defining chapter in the Apple growth story looking ahead despite a softer consumer spending environment, in our opinion. We are also are seeing a spike in demand out of India, which is an important trend to watch as this region could translate into some surprising iPhone units upside as Apple heads into this key launch period.
Maintains Outperform rating and Street-high $150 price target (bull case: $175).
My take: Bloomberg reported the same 75-80 million targets more than a month ago.