From a note to clients by Amit Daryanani that landed on my desktop Thursday:
All You Need to Know: We maintain our positive stance on AAPL post our survey of ~5,000 individuals regarding their iPhone purchasing intentions. Key Points:
- Demand for newer models is strong with 78% of respondents interested in buying one of the four new models (vs. 68% last year). The percentage of respondents interested in the Pro/Pro Max models has increased modestly vs last year’s survey which should provide a further mix benefit.
- Strong demand for new models is driving an ASP uplift with our survey pointing to an ASP of $838 vs. $806 last year.
- Battery life and 5G capabilities were tied for the most popular reason to upgrade, which seems to validate Apple’s large 5G marketing push.
- Average memory per device is pegged at 207GB vs. last year was 168GB, we are seeing stable memory loading at this point.
- Average App Store spend is up to $8.62 vs. $6.84, supporting our thesis that higher ARPU should become a key driver of Services growth going forward.
- Wearables continue to increase in popularity with major increase in % of consumers interested in Apple Watch and AirPods (could see a sizable uptick here given no earbud being shipped).
Net/net: Survey results point to solid iPhone mix, increasing App Store revenue per user, and growth in wearables demand. This supports our thesis calling for a strong iPhone cycle in the near-term and sustained long-term strength across the wearables and services business lines.
Maintains Outperform rating and $135 price target.
Cue Figures 1 and 2:
Click to enlarge.
My take: Six good reasons to be bullish.