UBS ups AAPL price target to $210 on increased iPhone X purchase intentions

Posted:
in iPhone edited June 1
In a poll of prospective iPhone purchasers, 84 percent of buyers say they'll get a pricey iPhone X or larger iPhone Plus model, pushing UBS to raise AAPL's price target to $210.

Tim Cook and Jony Ive with iPhone X


A poll of 6700 smartphone users provided to AppleInsider performed by UBS sees a shift in purchasing intent to the iPhone X and high-end iPhones. From that pool, 44 percent of purchasers in the US expect to buy an iPhone X, up dramatically from 30 percent in October 2017. Additionally, about 40 percent of the buyers are looking for Plus models, up slightly from 37 percent in the previous survey.

Buyers in China and Japan looking for the iPhone X are also over 40 percent of the as compared to other purchasers in the countries as well.

While overall intention to buy a new smartphone appears to be dropping worldwide, the buyers seeking the higher-end Apple phones should keep up average selling price, sustaining Apple's revenue growth from hardware sales. Buyers looking to get a pricey phone are favoring the iPhone over other competing brands -- another plus for Apple.

Global iPhone mix


Additionally, upgrade cycles are lengthening across the world. In the United States, the average periodicity of upgrades has increased from 2.0 years in 2016 to 2.2 years in 2018.

Brand loyalty and importance of innovation

Apple has always relied on customer retention to keep revenue high, and the iPhone X is no exception.

"We consider Apple's two most important metrics to be growth in the installed base, which we think is low double-digit for iPhone, and customer retention rate," writes analyst Stephen Milunovich. "Good results in those mean that it's when not if consumers buy their next iPhone."

Milunovich also believes that consumers are not excited about recent innovations like Face ID and augmented reality -- but they may be going forward.

"As Apple controls more of the component technology, it has started to differentiate with Face ID, an AI processor, and possibly AR," said Milunovich. "The ecosystem is the strongest in the industry as seen by the success of the App Store. Our platform view of the company is that software and services are there to create a superior customer experience and support premium hardware margins."

Customer survey of phone feature importance


Milunovich and UBS raised their price target not just because of the average selling price staying high, but also because of continued services revenue expansion.

Comments

  • Reply 1 of 14
    racerhomie3racerhomie3 Posts: 707member
    Yes. I absolutely love my iPhone SE & AirPods combination.

  • Reply 2 of 14
    FolioFolio Posts: 382member
    Wow, 6700 smartphone users is one serious survey. I hope the methodology was sound. Believe it was this same analyst who quoted something to the effect that Apple will get a higher multiple as people finally realize the brand is "more like Nike than Nokia."
  • Reply 3 of 14
    BebeBebe Posts: 107member
    If we go by this survey, Apple loyalists are really willing to spend just to have the latest Apple gadget. Just WOW!
  • Reply 4 of 14
    78Bandit78Bandit Posts: 190member
    Analyst puffery designed to artificially pump the stock price in the same way the negative reports of iPhone X sales at the end of April tried to bring the stock price down.  I bet another analyst from the same company puts out a doom-and-gloom piece before the end of the month so their customers are encouraged to "churn" their stock purchases on volatility and lock in their gains.
  • Reply 5 of 14
    SpamSandwichSpamSandwich Posts: 29,902member
    AAPL leaped to $190.24 at close. A new all-time high. I'm not complaining.

    Correction:  AAPL 52-week high was $190.37.
    edited June 1
  • Reply 6 of 14
    StrangeDaysStrangeDays Posts: 5,616member
    78Bandit said:
    Analyst puffery designed to artificially pump the stock price in the same way the negative reports of iPhone X sales at the end of April tried to bring the stock price down.  I bet another analyst from the same company puts out a doom-and-gloom piece before the end of the month so their customers are encouraged to "churn" their stock purchases on volatility and lock in their gains.
    How is this "puffery"? It's a poll of almost 7,000.
  • Reply 7 of 14
    The most important feature for my next phone will be 5G support. As long as we are on LTE my 7 is fine.

    I also do not want a glass back and have little interest in paying extra for fake bokeh or Face ID. If Face ID is standard, I want the option of turning it OFF.

    It is a cell phone. I am not a mobile first person- I want a desktop Mac 1st, a laptop 2nd an iPad third and an iPhone only if I have to. I would much rather drop the $ on a better iPad Pro or Mac.
  • Reply 8 of 14
    Bebe said:
    If we go by this survey, Apple loyalists are really willing to spend just to have the latest Apple gadget. Just WOW!
    Phff...Some people (with incomes of 300k-600k) buy a new Porsche every other year (which cost 70-150k new), and you are amused by the fact that a lot more people can buy a latest Apple gadget that costs 1k at most.
    jony0SpamSandwich
  • Reply 9 of 14
    MacProMacPro Posts: 17,586member
    Bebe said:
    If we go by this survey, Apple loyalists are really willing to spend just to have the latest Apple gadget. Just WOW!
    Phff...Some people (with incomes of 300k-600k) buy a new Porsche every other year (which cost 70-150k new), and you are amused by the fact that a lot more people can buy a latest Apple gadget that costs 1k at most.
    That's why I always felt the old analogy of Apple to BMW and <name supposed competitor> to <name cheap mass produced car> was reasonable on a few levels such as quality, target market and profits versus volume.  Although that was said 20 odd years ago the sentiment remains true IMHO.  
    edited June 2
  • Reply 10 of 14
    eriamjheriamjh Posts: 1,077member
    For the first time, I’m sticking with my iPhone for three years.  iPhone 7+ 256GB is just fine for me.   Gonna try to save a little money.  
    It doesn’t matter what the new iPhone X+/9/X2/whatever they call it is or can do.   I’m happy.  I’m not out of space.   And I’m not gonna update to iOS 12 the day it comes out until reports of other users confirm it doesn’t make my phone any slower.   
    wlym
  • Reply 11 of 14
    AAPL leaped to $190.24 at close. A new all-time high. I'm not complaining.

    Correction:  AAPL 52-week high was $190.37.
    Still, Facebook was upped to $255. Not bad for company that just had a data-breach scandal. Data-harvesting pays a lot better than hardware.
  • Reply 12 of 14
    78Bandit said:
    Analyst puffery designed to artificially pump the stock price in the same way the negative reports of iPhone X sales at the end of April tried to bring the stock price down.  I bet another analyst from the same company puts out a doom-and-gloom piece before the end of the month so their customers are encouraged to "churn" their stock purchases on volatility and lock in their gains.
    Actually he's been pretty bullish on Apple even when the other analysts were downgrading Apple.

    The problem is the market tends to believe negative news about Apple if more than one idiot starts talking about it.

    Remember when Jim Cramer was not shy about talking about making up stories about Apple to bring the stock down to buy more shares? 
  • Reply 13 of 14
    3rd most important "device feature"... network quality?? Surely that's down to the network's coverage and nothing to do with the device manufacturer?
  • Reply 14 of 14
    Mike WuertheleMike Wuerthele Posts: 3,321administrator
    adm1 said:
    3rd most important "device feature"... network quality?? Surely that's down to the network's coverage and nothing to do with the device manufacturer?
    There's a lot of engineering considerations that go into a phone and how well it will connect to a network. I do agree that maybe this should have been called something else, though.
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