High Demand for iPhone 15: Will it Drive Apple's Stock Price Up?
$Apple(AAPL.US$'s newly launched high-end iPhone 15 Pro Max is already facing supply constraints, with pre-order deliveries for some configurations being pushed back to November in countries such as China, Japan, and the United States. The strong demand for the new smartphone is evident from the extended wait times for delivery.For investors, will the strong pre-orders for Apple's latest product increase the company's stock price?
Global iPhone 15 pre-orders
Apple's latest release, the iPhone 15 series, was made available for pre-order on Friday in over forty countries after being unveiled at its late-fall event earlier last week.
The high-end Pro Max model also sees delayed delivery time from September 22 to as late as mid-November in the US.
In China, all iPhone 15 Pro Max models have faced shipment delays until November, while standard iPhone 15 Pro versions are experiencing three- to four-week waits. Over 3.4 million reservations placed on JD.com in China prior to opening orders reveal the high demand for the new product range. China's Meituan platform processed orders worth $27.5 million within the first thirty minutes of opening pre-orders.
Several countries, including the UK, Canada, Australia, France, Japan, and India, have been experiencing delivery delays of up to eight weeks for the iPhone 15 Pro Max's natural titanium version.
iPhone and Apple stock price
Apple's iPhone business is its most profitable hardware segment, contributing more than half of its $394 billion revenue in 2022, with over $205 billion coming from iPhone sales. The new iPhone model is expected to reverse a sales slide that has persisted for three quarters since the device accounts for about 50% of Apple's sales.
China has become the largest market for iPhones, accounting for 24% of all iPhone shipments in Q2 2023, while the U.S. market accounted for 21%, according to TechInsights. Despite increased competition from Huawei, the four-to-five-week wait period for the Pro Max in China offers relief to potential fears of a financial blow in Apple's third-largest market. TechInsights estimates that the global shipments of the iPhone 15 series are expected to reach 72 million units from commercial launch until the end of this year, surpassing the 70 million sales of the iPhone 14 series in the same period last year.
What did Wall Street say?
Apple's recent product releases have left analysts optimistic, with many bullish on the company's stocks.
According to Ivan Lam, a senior analyst at Counterpoint Research, Apple has maintained its unique user experience in its ecosystem, which has resulted in high customer retention and makes it difficult for users to switch to Android devices. Lam suggests that Apple will continue to be a clear winner in the over-US$800 smartphone segment due to strong user stickiness, which ensures a stable demand for replacement.
Shannon Cross of Credit Suisse has noted that new orders of the iPhone 15 Pro Max have longer estimated delivery times than last year's iPhone models, indicating higher demand for this year's model. Cross believes that aggressive discounting from carriers and customers with three-year-old iPhones contributes to the high demand for the new device. The analyst maintains a $220 price target on Apple's stock.
Dan Ives, the managing director of equity research at Wedbush Securities, has expressed the most optimistic outlook on Apple's stock among analysts. Ives believes that the stock could soar up to 38%from its current level in the next 12 months. His iPhone supply chain checks point towards a healthy supply chain for the device, which could result in robust sales.
Apple's price-to-earnings ratio of 30 surpasses the S&P 500's at 25.5, and analysts are expecting modest earnings-per-share growth of 8% in fiscal 2024.
What did the history tell?
Based on Techcrunch's calculations, if an investor had purchased Apple stock equivalent to the price of a top-of-the-line iPhone every time Apple released a new model, those shares would be worth approximately $147,000 today. This translates to a profit of around $131,000 with a cost of just $16,000.
In addition, Apple has typically underperformed in September over the past five years, with shares averaging a 4.5% decline compared to the S&P 500's drop of 3.2%. However, October has proven to be one of the best months for the company, with an average gain of 3.8% over the same period.
In other words, investing in Apple stock after launching a new iPhone seems to be an excellent long-term strategy, as the company's financial performance has historically supported such investments.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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SpyderCall : really good detailed info. I think a lot of investors were looking for this type of info after Huawei released their new phone with their own chip. Well done
71074137 : Buy the stock, forget the media noise and hold for 5 years
71074137 : If you buy now and you hold. In 5 years you’ll double your money. It’s that simple
Chak : The bastards CNBC pro release this news to the paid subscribers on the rogue traders . That’s why they started pumping to Stock and the retailers. When we come to know the stock is already high. We cannot trade it
“ it. Goldman says iPhone demand outpacing supply, sees 20% upside for Apple shares”
JS777520 : I don’t really see the deference , hopefully the vision pro will boost up the stock market , that’s what I’m aiming for…