A top analyst says Apple is on the cusp of another monster sales cycle for the iPhone 15 and its share price will break more records
AP
- Wedbush analyst Dan Ives, known for accurate Apple predictions, is boldly bullish on Apple's future.
- He's predicting massive sales of the iPhone 15 and growth of its services business.
- All of that has convinced him that the stock will keep breaking records.
Despite some signs that iPhone sales have slowed, one Apple watcher is predicting iPhone sales to bounce back and push its stock into stratospheric levels.
Revenues for iPhone were down 4% in the last six month-period compared to the year-ago period, Apple reported in May. But respected Wall Street analyst Dan Ives said in a research note obtained by Insider that around 250 million aging iPhones are out there and haven't been upgraded in at least four years.
Ives believes that the iPhone 15 will convince these folks, as well as the iPhone faithful, to buy new versions and to spend more on them. He predicts that Apple will raise prices and command an average sale price of around $925, which is $100 higher than the average sales price Apple has commanded for new iPhones over the past 18 months.
Many in the industry are also speculating that Apple will raise prices for its newest iPhone when it announces it in the fall. And Ives has been right when he's made predictions about iPhone pricing in the past.
Right now, prices for Apple's state-of-the-art iPhone 14 Pro Max start at $1099, with the slightly smaller pro starting at $999. But you can buy the smallest 14 for $799 if 128G of storage will do you (to double that storage costs $100 more). So whether Apple will raise prices all the way around, or just on its key $799 model, or at all, we'll have to wait and see when Apple announces the new iPhones, which typically happens in the fall.
Ives also believes that the new Vision Pro AR headset isn't the real underrated star of Apple's future. He believes the Services business is, which encompasses all the money Apple makes on its cloud services (storage, App Store, AppleTV, Fitness, advertising, etc.). Services is on pace to approach $100 billion compared to the roughly $50 billion it had in 2020, he writes in his note.
Specifically, Apple's six months' revenue for Services was $41.7 billion, up 6%, (as of the second quarter, FY 23 that ended in April). So, Ives might be optimistic that Services will hit $100 billion instead of the $82 billion that it is tracking for, at least in its current fiscal year.
But he's not wrong that Services growth is astounding and that it is quickly marching toward $100 billion.
All of this has led Ives to predict that Apple's share prices are still a relative bargain. He raised his price target to $220/share. That's a bold prediction, given that Apple hasn't yet reached his previous target of $205. But the stock is on a tear lately, hitting one all-time high after another in June, and is currently trading at about $181.
And one more thing. Whether you think the Vision Pro will succeed or bomb. Whether you think the iPhone is awesome or overrated, there hasn't been this much optimism about Apple's future in years.