Apple's iPhone 16 Series Leads Growth, But High-End Model Preference Declines: Analyst

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JP Morgan's Samik Chatterjee reaffirms Apple’s Overweight rating with a $265 target, citing strong interest in the iPhone 16 series.
Consumer demand for iPhone 16 is high, but fewer upgraders prefer premium models compared to last year's iPhone 15 cycle.

JPMorgan analyst Samik Chatterjee maintained an Overweight rating on Apple Inc AAPL with a price target of $265.

Chatterjee recently surveyed to gauge consumer appetite relative to their interest in purchasing a new iPhone and Apple Watch, including the latest generation products launched in September.

Consumer feedback confirmed his outlook for the iPhone 16 series, which includes a more robust cycle led by higher interest from both upgraders and switchers.

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However, the analyst said upgraders show a lower preference for high-end models than the prior year.

Chatterjee noted that, in line with global trends, consumers polled in critical geographies, the U.S. and China, expressed greater interest in purchasing a new iPhone in 2024 than in 2023.

He noted the top reasons for buying a new iPhone continue to be a faster device and 5G connectivity, similar to the results for the iPhone 15 Series a year ago. Interestingly, Apple Intelligence features did not make it to the top five reasons to buy the new iPhone but were the sixth top reason, and the analyst noted the staggered launch and limited availability of features for consumers to try are driving this trend.

Chatterjee noted the Pro Max model remained the most popular iPhone among consumers, underscoring the preference for the latest "high-end" models in the iPhone line-up. That said, the aggregate popularity of the high-end models within the 16 Series is modestly lower compared to the 15 series a year ago. Preference for high-end phones within the 16 series is modestly lower relative to the prior cycle across both the U.S. and China, particularly in China, he flagged.

He said Samsung continues to be the dominant smartphone OEM outside of Apple, while Huawei continues to show dominance in China. The analyst noted a large majority of Android users surveyed in China showed an appetite to switch to Apple.

AAPL Price Action: Apple stock is up 0.29% at $226.83 at publication Wednesday.

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