Apple Analyst Sees iPhone 14 Boost From Pent Up Demand, Says This Was Biggest Surprise For Wall Street

Wedbush analyst Dan Ives has shared his take on the just concluded Apple Inc AAPL event where the iPhone 14, the Apple Watch Series 8 and AirPods Pro 2 debuted.

The Apple Analyst: Ives continued to maintain his “outperform” rating on the Tim Cook-led company with a 12-month price target of $220.

The Apple Thesis: Ives termed the release of iPhone 14 and Pro Max as the main event and said it “continues to be the core success story of this impressive iPhone upgrade cycle taking the baton from iPhone 13.”

See Also: How To Buy Apple (AAPL) Shares

The analyst said the iPhone 14 has “notable upgrades and changes” and that comes with “NO price increase which was a surprise to the Street.”

Wedbush believes, based on its recent checks, that the initial orders for 90 million iPhone 14 units with Asian suppliers have stayed firm.

“This speaks to the underlying demand story that Apple anticipates for this next iPhone release with our estimates that 240 million of 1 billion iPhone users worldwide have not upgraded their phones in over 3.5 years,” wrote Ives.

He said that Apple is expecting a heavy iPhone Pro and Pro Max shift, which would be a positive for the average selling price heading into FY 2023.

Despite softer macroeconomic fundamentals, Ives said the baseline for nearly 220 million iPhone units in FY 2023 is a “low bar given the pent-up demand story that we are seeing globally for Apple.”

In China, Wedbush estimates that 30% of iPhone customers are in the window of the upgrade cycle.

The analyst expects “significant promotional activity” from carriers around the iPhone 14 beginning in September.

Price Action: On Wednesday, Apple shares closed 0.9% higher at $155.96 in the regular session.

Read Next: Apple Introduces Next Generation AirPods Pro

Photo courtesy: Apple