Pent-up demand could drive strong 'iPhone 13' cycle into 2022, analyst says

Posted:
in AAPL Investors
Ahead of the potential launch of the "iPhone 13" later in 2021, Wedbush believes there is still "massive" pent-up demand for new smartphones within Apple's customer base.

Credit: Andrew O'Hara, AppleInsider
Credit: Andrew O'Hara, AppleInsider


In a note to investors seen by AppleInsider, Wedbush lead analyst Daniel Ives acknowledges that Apple shares have underperformed thus far in 2021. Ives attributes that to Wall Street being unconvinced about continued iPhone growth.

However, the analyst believes that current demand could point toward another strong cycle for Apple's upcoming 2021 iPhone models.

Recent Asia supply checks have put current iPhone builds between 130 million and 150 million, with the "iPhone 13" representing about 35% to 45% of those models. That gives Ives increased confidence that the next iPhone lineup is slated for debut in the third week of September.

Build numbers for the "iPhone 13" appear to be clocking in at around 90 million to 100 million units. Compared to the iPhone 12 lineup at 80 million units this time pre-launch, Ives says that represents a 20% year-over-year increase out of the gates.

"While this number will clearly move around over the coming months (chip shortage volatility adds to it), we believe this speaks to an increased confidence with Cook & Co. that this 5G driven product cycle will extend well into 2022 and should also benefit from a post vaccine consumer reopening environment," Ives writes.

As far "iPhone 13" specifications, the analyst predicts that the lineup will add a 1TB storage option and will include a number of LiDAR-related enhancements across the lineup.

Because about 250 million out of the current 975 million iPhone models have not yet been upgraded in the past three and a half years, Ives says that Apples current "robust consumer product cycle" will continue well into 2022.

However, Ives does admit that there appears to be a roughly $20-per-share "overhang" on Apple's stock because of antitrust scrutiny and government regulatory momentum. He cites other concerns like the Epic Games v. Apple verdict and the appointment of FTC head Lina Khan, who is an antitrust scholar.

Although the analyst thinks that the antitrust scrutiny represents a "headline risk" for Apple, he believes that the company and its App Store remain very defendable.

Ives still believes that Apple remains a top tech stock to own as he expects the tech bull cycle to continue and a new iPhone lineup to drive a potential $3 trillion valuation by 2022.

He maintains his 12-month Apple price target, a sum-of-the-parts valuation based on Wedbush's 2022 estimates. It includes a 16x multiple applied to Services at $1.3 trillion and a 7x multiple applied to the rest of Apple's hardware ecosystem at $2.1 trillion.

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Comments

  • Reply 1 of 8
    DAalsethDAalseth Posts: 1,616member
    Every year the swallows come back to Capistrano, the Buzzards come back to Hinckley, and analysts say the new iPhone will sell well because of pent up demand. It always happens at the end of June-first half of July. Most years it follows by a month them explaining why it didn’t come true the preceding year.
    edited June 21 BeatsGeorgeBMacsbdudeFileMakerFeller
  • Reply 2 of 8
    GeorgeBMacGeorgeBMac Posts: 9,804member
    Personally I'm betting they avoid the number "13" and go with 12S.   And that will likely fit:  the 12 was a major upgrade in many ways.   The next will be refinements -- such as an improved 5G Modem -- and that's what the "S" models have always been about:  internal improvements.
  • Reply 3 of 8
    sbdudesbdude Posts: 61member
    Personally I'm betting they avoid the number "13" and go with 12S.   And that will likely fit:  the 12 was a major upgrade in many ways.   The next will be refinements -- such as an improved 5G Modem -- and that's what the "S" models have always been about:  internal improvements.

    I'm betting they skip "13" altogether owing to triskaidekaphobia. Then again, they sold the iPhone 4 in China despite "4" being a homophone for the word death in Chinese, so who knows. Either way, you have your most useless trivia fact of the day. Share with your friends!
  • Reply 4 of 8
    sbdudesbdude Posts: 61member
    DAalseth said:
    Every year the swallows come back to Capistrano, the Buzzards come back to Hinckley, and analysts say the new iPhone will sell well because of pent up demand. It always happens at the end of June-first half of July. Most years it follows by a month them explaining why it didn’t come true the preceding year.

    At least the word "supercycle" didn't come up.
    GeorgeBMac
  • Reply 5 of 8
    Was thinking of upgrading this year but leaning more towards getting another year out of my XS.  Got a applecare replacement in November so battery fresh.
  • Reply 6 of 8
    GeorgeBMacGeorgeBMac Posts: 9,804member
    Was thinking of upgrading this year but leaning more towards getting another year out of my XS.  Got a applecare replacement in November so battery fresh.

    My grandson has a 12 Pro and I have his old Xr -- which is running great.
    No phones for either of us this year!
  • Reply 7 of 8
    crowleycrowley Posts: 8,199member
    I don't get it, why is there pent up demand?  Sounds like this guy is trying use it as a magic phrase, which no rationale.
    GeorgeBMacmuthuk_vanalingam
  • Reply 8 of 8
    crowley said:
    I don't get it, why is there pent up demand?  Sounds like this guy is trying use it as a magic phrase, which no rationale.
    https://giphy.com/gifs/film-horror-bruce-campbell-wvhBL3zIKSX0A
    edited June 22
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