Analyst: iPhone 8 Should Release Pent-Up Demand For Apple

While Apple Inc. AAPL is under a relatively slow period of news, the company is off to a solid 2017, with shares gaining nearly 33 percent year-to-date.

The catalyst everyone is waiting for is the highly-anticipated iPhone 8 launch, likely set for a September release.

Credit Suisse analysts are convinced the iPhone’s upcoming product cycle will be significant in driving multi-year unit growth. It's likely the latest ‘super-cycle’ will introduce higher pricing tiers and improved mix. Apple's iPhone installed base now has just under 700 million users.

See Also: Can Apple Supply Enough iPhone 8s To Avoid Bottlenecks? That Remains To Be Seen

“We see the 8 Super-cycle will unleash pent-up demand, driving unit shipments to 229mn/250mn/270mn in CY17/18/19, with the iPhone installed base expanding to 775mn/890mn/970mn,” said Credit Suisse analyst Kulbinder Garcha.

Apple has historically raised iPhone prices along with key updates, meaning it likely that the latest release will follow suit. Garcha believes the average selling price of the subsequent iPhone releases will reach $676/$704/$676 in CY17/18/19, versus $647 in CY16. The highest tier of the latest phone could reach the $900 price point.

More Good News

In another positive outcome for Apple, Nokia OYJ(ADR) NOK has signed an agreement to settle all ongoing litigation with the company. Nokia will receive an upfront cash payment from Apple in Q217, along with additional revenues through the term of agreement.

Credit Suisse maintains an Outperform rating on Apple, with a $170 price target.