Apple's iPhone 15 Thrives Despite Huawei Competition: Analyst Predicts Continued Success Into 2024

Wedbush analyst Daniel Ives reiterated an Outperform rating on Apple Inc AAPL with a price target of $240.

Ives' recent supply chain checks in Asia indicate strong demand for Apple's iPhone 15, especially in China, countering previous negative expectations. 

Analysts observe no major downward revisions around iPhone units coming out of Asia into holiday season/early 2024, suggesting steady consumer interest, which is positive news for Apple CEO Tim Cook.

In the U.S., sales of the iPhone 15 since its launch have been robust. The period from Black Friday to Christmas will likely see modest growth in sales compared to the iPhone 14, despite earlier concerns of underperformance. 

Despite Huawei's success with its latest smartphone in China, Apple is experiencing modest growth in iPhone sales for the December quarter. The deals are bolstered by a higher proportion of iPhone Pro models, with about 80% of iPhone 15 sales being Pro versions compared to 60% for the iPhone 14.

The average selling price (ASP) of iPhones is rising, now approaching $925, from the previous range of $825 to $850. For the December quarter, iPhone revenue is expected to increase year-over-year modestly and is currently tracking slightly ahead of expectations for the Black Friday weekend.

Ives noted that Apple's service revenue is returning to double-digit growth, and iPhone unit sales will likely be around 225 million for FY24. Despite challenges in China and competition from Huawei, Apple's iPhone remains a premium choice in the region.

The company is positioned firmly for 2024, with the reacceleration of its critical services business and a robust iPhone 15 upgrade cycle over the next 6 to 9 months.

The analyst maintains Apple as one of his top tech picks. He forecasts Q1 revenue and EPS at $117.96 billion (consensus $117.84 billion) and $2.10 (consensus $2.09), respectively.

Price Action: AAPL shares traded lower by 0.83% at $189.73 on the last check Friday.

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