Apple Inc. (NASDAQ:AAPL) is beginning to showcase promising indications that its premium-first iPhone strategy is gaining momentum, particularly as demand for the iPhone 18 Pro surges in China, accompanied by extended delivery timelines in key markets. This trend bolsters anticipations for a more lucrative product mix and potential revenue growth.
Robust Start for iPhone 18 Pro in China
Counterpoint Research has reported a 12% year-over-year increase in sales for the iPhone 18 Pro series during its inaugural three days, thereby propelling Apple to the top spot in China’s smartphone market during Week 38 with a commanding 33% share.
This impressive performance unfolded against a backdrop of a sharp decline in weekly smartphone sales in China, which have plummeted by double digits year-on-year since July, attributed to weakened consumer demand coupled with escalating memory costs.
Senior Analyst Ivan Lam from Counterpoint stated that “the delayed launch of the standard iPhone 18 may have incentivized consumers to opt for the Pro models, while significant price increases of over $200 on numerous Chinese flagship devices may have elevated the price threshold, thereby enhancing the iPhone’s relative value.”
Looking ahead, Counterpoint anticipates that September’s new product unveilings will stimulate a sequential recovery within the market.
Furthermore, the latest generation of Chinese Android flagship phones is predicted to experience diminished sales compared to previous iterations in the fourth quarter, primarily due to rising memory and 2nm-chip expenses.
Munster Affirms Efficacy of Premium-First Strategy
Gene Munster, Managing Partner of Deepwater Asset Management, has noted indications that Apple’s strategy to introduce the pricier iPhone 18 Pro and Pro Max models ahead of the base model is yielding beneficial results.
His analysis across eight nations reveals that delivery lead times for the Pro models have increased by 15% compared to the previous year, contrary to his predictions of shorter waiting periods.
This data implies that consumers may be favoring premium models rather than postponing their purchases for the basic iPhone scheduled for spring 2027.
The forthcoming challenge will be the rollout of Apple’s foldable Duo, with preorders commencing on October 16 and deliveries set for October 23.
Munster Asserts Revenue Projections Underestimated
Munster pointed to the consensus for fiscal 2027 iPhone revenue estimates at $9.5 billion, asserting, “I believe the market is underrating iPhone revenue for FY27 by approximately 10%.”
He anticipates that the Duo, priced at $2,100, could secure a 35% market share in its inaugural year, with an estimated one-third of Pro Max users likely transitioning to the foldable variant.
Moreover, Munster foresees the Duo representing roughly 8% of iPhone units in the coming year, but contributing 14% to iPhone revenue, as elevated average selling prices could enhance overall revenue by 10%.
Analyst Consensus on Apple & Recent Developments
Apple stock currently holds a Buy rating, featuring an average price target of $335.57. Noteworthy recent movements among analysts include:
- Morgan Stanley: Overweight (Maintains Forecast at $360.00) (Sept. 29)
- B of A Securities: Buy (Maintains Forecast at $370.00) (Sept. 23)
- Evercore ISI Group: Outperform (Raises Forecast to $380.00) (Sept. 18)
Leading ETF Exposure
- Schwab US Large-Cap Growth ETF (NYSE:SCHG): 9.88% Weight
- Direxion Daily Technology Bull 3X ETF (NYSE:TECL): 9.68% Weight
- Motley Fool 100 Index ETF (BATS:TMFC): 9.86% Weight
Significance: Given AAPL’s substantial weighting in these funds, any significant inflows or outflows would likely trigger automatic buying or selling of the stock.
AAPL Price Dynamics: During premarket trading on Wednesday, Apple shares experienced a slight decline of 0.06%, pricing at $329.19, as per data from Benzinga Pro.
Source link: Benzinga.com.
