Wedbush’s Dan Ives: iPhone preorders are up 20% out of the gate

From a note to clients that landed on my desktop Thursday:

Based on gauging pre-order activity across the globe to its predecessor iPhone 12 we believe iPhone 13 pre-orders are currently running north of 20% ahead of Apple’s launch last year, an impressive start for this latest upgrade cycle out of Cupertino.

China has been leading the way with preorders that could approach the 5 million/6 million mark based on data coming out of China e-commerce sites including JD.com.

We continue to believe the models skew towards iPhone 13 Pro and Pro Max which is important around driving ASPs higher and overall top-line growth for Cupertino over the coming quarters. We also believe attractive carrier trade-ins and discounts from the likes of AT&T and Verizon are pulling in significant demand as many fence sitting Apple customers now look to trade in their iPhones (including many that have not upgraded in 3 years+) for the new iPhone 13.

Apple remains in the midst of its strongest overall product cycle in roughly a decade. Our Asia supply chain checks for 2H heading continue to put iPhone builds between 130M-150M. Asia supply chain builds for iPhone 13 are currently still in the ~90 million unit range compared to our initial iPhone 12 reads at 80 million units (pre-COVID) and represents a ~10% + increase YoY out of the gates.

In a nutshell on the iPhone front, we believe the robust consumer product cycle continues globally for Cook & Co. especially with today roughly 250 million of the current 975 million iPhones not upgrading their smartphones in over 3.5 years based on our analysis, speaking to massive pent up demand within Apple’s installed base.

Apple remains a top tech name to own. We remain very bullish on tech stocks into the rest of the year with our favorite large cap tech name to play the 5G transformational cycle is Apple, with the 1-2 punch of its massive services business and iPhone product cycle translating into a $3 trillion market cap for Cupertino in the next 6 to 12 months in our opinion.

Maintains Outperform rating and $185 price target.

My take: For subscribers who joined Ives’ ask-me-anything Zoom call last Thursday, most of this is old news. Missed the Zoom? Click here.

6 Comments

  1. Jeff Galanti said:
    While Apple clearly has a second-to-none marketing machine pushing the iPhone, I think one of the largest sources of tailwinds that we will see in the next few weeks will be Instagram and Tik Tok videos showing off these new cameras and software. Ironically, satisfaction of demand will create more demand – a good problem to have for those holding the supply.

    5
    September 23, 2021
    • Bart Yee said:
      @Jeff Wish I could upvote your 100x! Apple’s users (and influencers) are their biggest brand ambassadors and free publicity. We will soon see not only the hardware in release and action, we’ll get reviews and tutorials on how iOS 15, further advances in computational photography work (pay attention Joanna Stern), and how well they play together.

      Adding more fuel to the fire and extending demand worldwide into 2022.

      2
      September 23, 2021
  2. Peter Kropf said:
    My T-Mobile iPhone preorder is landing tomorrow.

    3
    September 23, 2021
  3. Fred Stein said:
    Again, simple arithmetic.

    Only about 25% of the IB upgraded to the 12. And some non-trivial portion of them will upgrade to the 13. And the IB grows each year by 1% to 1.5% according the Gene Munster.

    That’s just the iPhone. All the rest of Apple is blasting away.

    That’s the obvious stuff. The entire image processing stack upgrades, from chips to ecosystem, has potential that cannot be counted accurately.

    2
    September 23, 2021
  4. Robert Paul Leitao said:
    New, more capable handsets with larger storage capacities foster greater consumer engagement with Apple-related services. It’s a win for growth in Apple’s services revenue as well as revenue sourced from device sales. Additionally, carrier promotions to lock-in longer-term post-paid contracts is a tailwind for device sales. Apple One may also be a “sleeper” success from higher rates of consumer engagement.

    2
    September 23, 2021
  5. Bob Goldstein said:
    I just did my part. I ordered the new iPad. It is replacing my iPad Air2. The reason I am upgrading is that it seems like my wifi signal is slowing down. My iPhone 7 is much faster on wifi. At home I pretty much just use my iPad and iMac. iPhone 7 is good enough though the new camera is temping

    1
    September 23, 2021

Leave a Reply