Daniel Ives: Tim Cook has sailed Apple safely through the macro storms

"Heading into iPhone 14 Launch Next Week, Another Pivotal Moment for Cupertino."

From a note to Wedbush clients that landed on my desktop Monday:

Our Asia supply chain checks on Apple over the last few weeks remain very firm (further slight improvement week over week) as Cupertino is in the final stages of setting up for its iPhone 14 release next week on September 7th. Hitting this target launch with the supply chain issues and zero Covid shutdown seen earlier this year is another massive achievement for Cook & Co.

We believe the initial order for 90 million iPhone 14 units out of the gates has stayed firm and will be roughly flat with iPhone 13 despite the macro storm clouds building... In particular we believe Apple is expecting another heavy iPhone Pro and Pro Max mix shift which is a clear positive for ASPs heading into FY23. While the base iPhone will stay at the same price we believe a $100 price increase on the iPhone 14 Pro/Pro Max is likely in store given component price increases as well as added functionality on this new release...

Despite the zero Covid shutdowns in China that disrupted the Asia supply chain across the board in March-May and caused some white knuckles on the Street, Cook yet again navigated Cupertino through the storm and now is set for another flagship iPhone 14 upgrade cycle to take place over the next 6 to 9 months. While the softer macro will clearly play a role in the demand story, we believe the baseline for 220 million iPhone units in FY23 is likely a low bar given the pent up demand story that we are seeing globally for Apple...

In a nutshell, we believe Apple's growth story remains well intact with clear momentum around iPhone 14 around the corner despite the shaky macro.

Maintains Outperform rating and $220 price target.

My take: I'm getting strong Captain Cook echoes from Ives today. His note sent me to Wikipedia...

Cook sailed thousands of miles across largely uncharted areas of the globe. He mapped lands from New Zealand to Hawaii in the Pacific Ocean in greater detail and on a scale not previously charted by Western explorers. He surveyed and named features, and recorded islands and coastlines on European maps for the first time. He displayed a combination of seamanship, superior surveying and cartographic skills, physical courage, and an ability to lead men in adverse conditions.

5 Comments

  1. David Emery said:
    “My take: I’m getting strong Captain Cook echoes from Ives today.”

    In that case, Tim Cook should be prohibited from going to Hawaii 🙂

    7
    August 29, 2022
  2. Gregg Thurman said:
    Me? What Ives said.

    1
    August 29, 2022
  3. Captain Cook was the 1st European to witness surfing. He wrote about it in his ship logs while in Hawaii.

    0
    August 29, 2022
  4. Brian Loftus said:
    I am missing the “pivotal” point.
    Apple has never been stronger and its also never been stronger relative to its competitors at any time in its history. Its only substantial threat is regulatory.

    3
    August 29, 2022

Leave a Reply