GBH Insights Bets Apple Inc. (AAPL) iPhone X Pre-Order Demand Could Reach 50 Million Units

Daniel Ives thinks AAPL pre-order demand is a positive indication revving into iPhone X launch week.


Apple Inc. (NASDAQ:AAPL) is all set to evolve the product industry with its “transformational” iPhone X already attracting a great deal of early buzz throughout the Street and smartphone industry alike, or so believes GBH Insights Daniel Ives. For this reason, the analyst highlights enticing pre-order demand as a reassuring sign approaching iPhone X launch week.

Therefore, the analyst reiterates a Highly Attractive rating on AAPL stock with a valuation target set between $190 and $200, which represents a 20% increase from current levels. (To watch Ives’ track record, click here)

Ives notes, “Tracking lead time and initial demand across the globe since Friday, we would characterize this first stage of the iPhone X release as a ‘stellar success’ with current lead times still 5-6 weeks vs. our expectation of 4 weeks speaking to the major imbalance between supply and demand of iPhone X coming out of the gates. We now believe pre-order demand could be closer to 50 million units of iPhone X vs. our original estimate of 40 million, which is more than double the current supply of iPhone X out of Asia currently available for shipments over the coming months. With the official launch of iPhone X in Apple retail stores slated for this Friday, November 3, we anticipate very high demand globally with limited supply of iPhone X on hand […] we do not see supply/demand balance reached until the April/May 2018 timeframe as iPhone X demand gets ramped over the coming months with complex production issues (OLED, 3D, sensor, antenna issues, facial recognition) being resolved across the supply chain.”

With the Street’s attention peeled to earnings due this Thursday evening, the analyst’s vote is on a “defining product launch,” with the analyst calling for average selling prices (ASPs) to hit $756 in fiscal 2018, quite the jump from $650 in fiscal 2017. With hints of a whopping installed base surging well ahead of 350 million users owning an iPhone two years and older, the analyst concludes that this spells out heavy-hitting pent up demand around the world. All this bodes well for the tech titan.

Wall Street tends to bullishly side with Ives on the tech titan, as TipRanks analytics demonstrate AAPL as a Strong Buy. Based on 30 analysts polled by TipRanks in the last 3 months, 23 rate a Buy on Apple stock while 7 maintain a Hold. The 12-month average price target stands at $177.55, marking a nearly 7% upside from where the stock is currently trading.