iPhone Demand Remains High Despite Technology Market Slowdown, Say Analysts

iPhone demand this quarter has thus far remained 'surprisingly resilient' despite the widespread supply chain issues and other factors affecting the tech industry, according to Wedbush analysts Daniel Ives and John Katsingris.

Summing up their research findings in a new investor note, the market analysts said Apple's flagship devices had been holding up well despite 'compression across the board in tech' and fears of a growth slowdown rising, as reflected in Apple's reduced share price.

The albatross for the June quarter in our investor conversations over the past month have naturally been the Covid lockdowns in China which will negatively impact revenue by between $4 billion and $8 billion as a headwind according to Cook & Co.'s guidance given last month.

As of now we believe iPhone demand is holding up better than expected (despite the various supply issues that have plagued Apple and the rest of the tech sector) and are trending better than management's guidance thus far in the quarter.Apple last month said that lockdown disruptions in China and silicon shortages would continue to make it difficult to make enough product to satisfy strong consumer demand as the year progresses, and that this would ultimately affect Apple's June quarter revenue.

Wedbush said lockdowns and supply chain issues should be 'peak worry' in the June quarter, but that then they would subside into the key September and December quarters on the heels of Apple's iPhone 14 launch.

We believe the initial bogey and production plans for iPhone 14 should be up modestly from iPhone 13 out of the gates which speaks to Apple's confidence that pent up demand for this next release remain healthy despite the jittery macro.Wedbush analysts claim the stickiness of Apple's upgrade cycle is being underestimated by investors and Apple's installed user base will be key to ‌iPhone 14‌ sales this year, with almost a quarter of the 1 billion iPhones in general circulation having not been upgraded for roughly 3.5 years.

On top of this advantage Apple holds over rivals, Wedbush expects Apple's services business to account for roughly $80 billion of annual revenue this year and is set to grow at a 'steady double- digit clip' into 2023. 'We believe Apple's services business is worth alone north of $1 trillion which coupled with the flagship hardware business makes the risk/reward very compelling at current levels,' said the analysts.Tag: WedbushThis article, "iPhone Demand Remains High Despite Technology Market Slowdown, Say Analysts" first appeared on MacRumors.comDiscuss this article in our forums