The iPhone 11 is nearly upon us with its release date of Sept. 20, and analysts are already seeing promise for Apple Inc. with preorder data.
Private financial service and investment firm Wedbush Securities Inc. and agency model broker Instinet both observed a positive demand trend on the weekend after the Apple Special Event—which made news of the highly anticipated iPhone 11 public.
According to a report from Market Watch, Apple opened up online preorders for the new iPhone 11, 11 Pro and Pro Max slates at a time when the industry questioned whether the tech giant would have a disappointing upgrade cycle over its limited feature updates and lacking 5G compatibility.
Analyst Daniel Ives of Wedbush Securities told Market Watch that his analysis of pre-order data shows extended delivery times “across a number of models with many iPhones now slated for delivery two to three weeks after the Sept. 20 official release date.”
He added that “some variants of the 256GB iPhone 11 Pro” were showing strength alongside some space gray and gold models.
Ives also noted that a key market for Apple is in China. He estimated that about 60 to 70 million iPhones in China are eligible for an upgrade. Whether Apple can convince these customers to upgrade will be a hurdle the tech company has to face, and the task may be difficult as the U.S. and China continue an embroiled trade war. Ives’ analysis said Apple needs to convince about half of these users to buy new phones to be successful.
Despite these concerns, he rates the stock to outperform expectations with a $245 price target.
On the other hand, Jeffrey Kvaal, managing director of communications equity research at Nomura Securities’ Instinet told Market Watch he is encouraged by the longer shipment times seen in the three iPhone 11 models.
According to his findings, the premium iPhone 11 Pro and 11 Pro Max had shown shipment times of about 17 days on Sunday, whereas the iPhone XS and XS Max of last year had shipment times around 11 days.
The mass market-friendly iPhone 11 had shown a shipment time of about 12 days for delivery, which is roughly three days more than last year’s iPhone XR.
Kvaal drove his point that longer wait times correlate with higher demand.
“While shipment times reflect the balance of supply and demand, our supply chain work indicates supply is flat year over year,” he explained. “We interpret that to mean the 11 is off to a healthy start in the U.S.”
His analysis has a neutral rating and a $185 target on shares.
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Conversely, Amit Daryanani of equity research and sales agency Evercore ISI reportedly said in a note to a client that he sees an “inherent upside” to Apple’s third quarter earnings estimates, according to Market Watch.