Wall Street is eagerly waiting to see how Apple did during its fourth fiscal quarter, with the success of the iPhone 14 a subject of debate among analysts.

$Apple(AAPL.US)$ launched new Apple Watches and the highly anticipated iPhone 14 in September, it was a particularly bad month for the stock. Not only has the overall market been selling off, investors have been grappling with doubts about how strong demand for the new iPhone has been, and whether sales of more expensive models will offset the damage if consumer spending slows down.
Jefferies analyst Edison Lee noted that iPhone 14 demand was potentially weaker than expected in China as fewer Chinese customers bought the new iPhone 14 in the first days it was available compared with the iPhone 13. Shortly after, Bloomberg reported that the company had reversed plans to boost iPhone 14 production later this year given softer-than-expected demand.
But Citi analyst Jim Suva doesn’t agree. “Apple shares have slightly outperformed the broader market, given better-than-feared results year to date, continued product launches, and positive news flow on consumer preference for higher average selling priced (ASP) iPhone 14 Pro models,” Suva wrote. Suva did note some potential problems that could hit the company, including the strength of the dollar. However, “mix shift to higher priced iPhone Pros, coupled with component price declines (about 15% declines in mobile memory ASPs) and freight costs declines, should help to partially offset margin headwinds from foreign exchange,” he wrote.
The debate matters because iPhone sales accounted for about half of Apple’s $83 billion of revenue for its third quarter.
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