- Earnings seen accelerating over the next few years
- Optimism around China sales rebound firming
- AI-driven iPhone 16 set for September 2024 launch
Could Apple (AAPL:NASDAQ) be on the cusp of a new iPhone sales ‘supercycle’? That’s the question posed by analysts at Wedbush, and their answer is firmly, YES!
The Cupertino-based tech giant has faced accusation that it was slow at getting its AI (artificial intelligence) act together, yet the launch of iPhone 16 in September could trigger a significant growth phase over the next year, according to Wedbush.
In a recent note, the investment firm projected that initial iPhone 16 shipments could surpass 90 million units, topping the original market expectations of 80 to 84 million units, and marking a double-digit increase year-on-year.
‘We are seeing more indications across the Asia supply chain this iPhone upgrade cycle could be a historical one setting the stage for a supercycle as currently we estimate roughly 300 million iPhones globally have not upgraded in over four years’, the analysts noted.
‘In our view, Apple could sell north of 240 million iPhone units in full year 2025 (to Sep) as this AI-driven upgrade cycle takes hold.’
CRITICAL CHINA CALL
China will be a critical test of that thesis, where sales have been sluggish. In the June 2024 quarter sales from Greater China (including Taiwan and Hong Kong) fell 6.5% to $14.7 billion, drifting again after declines of 8% were posted in the quarter to March.
But Wedbush has been checking across the Asia supply chain and believe there are growing reasons for optimism. Since Apple’s Worldwide Developers Conference in early June, the narrative has been steadily improving with building anticipation that the iPhone 16 could herald a ‘golden upgrade cycle’ for Apple, driven by pent-up global demand.
‘With the Apple Intelligence launch, the market is starting to recognize Apple’s potential to become the gatekeepers of the consumer AI revolution’, Wedbush stated.
Koyfin consensus has Apple earnings accelerating over the next few years back into double digits after flat revenues reported for fiscal 2023. Apple stock is up 21% year to date at $226.05.
