GBH Insights Predicts Apple Inc. (AAPL) iPhone X Launch to Be Biggest Ever (Yes, Even Better than the iPhone 6)

Daniel Ives sees a mega "super cycle" for the AAPL iPhone X, but says it will not happen "overnight."

Apple Inc. (NASDAQ:AAPL) pre-orders are ready to take off this Friday with the launch firing up by November 3rd, an event that all the Street chattering with booming expectations. Yet, how will production challenges from upgraded technology in the iPhone X translate to the iPhone cycle’s performance for the title?

GBH Insights analyst Daniel Ives believes this cycle is going to be an all-star home run for the tech titan, going as far as to wager: “This will be a defining product launch for Cook & Co. that we ultimately believe will be Apple’s biggest iPhone product cycle to date, surpassing its previous peak sales for the iPhone 6 cycle in FY15.”

Therefore, approaching the iPhone X pre-order launch in three days’ time, the analyst reiterates a Highly Attractive rating on AAPL stock while setting a valuation range between $190 to $200, which implies a just under 21% increase to a 27% increase from where the stock is currently trading. (To watch Ives’ track record, click here)

However, this mega iPhone product cycle first has to get past some hurdles first: “Unique to what we believe will be an elongated ‘super cycle’ launch around iPhone X are the well-known complex production issues (OLED, 3D, sensor, antenna issues, facial recognition) that have significantly slowed down supply out of Asia ahead of launch period,” explains the analyst.

As far as Ives assesses the iPhone backdrop, pre-order demand could surpass 40 million iPhone X units, which would circle pass the present supply in Asia twice over in the next months for shipments. Based on this two-to-one demand/supply ratio, investors will have to quake through Spring of next year before the long demand pays off in fiscal 2018, the analyst writes. Yet, with the benefit of a “massive” installed base shooting past 350 million users using an iPhone already two plus years old, demand will be meaningfully “pent up” across the globe and especially out of one key part of the world: China.

Overall, for investors willing to bide the time, the analyst is betting on a major payoff for a super cycle that takes time to wind up past some short-term obstacles: “This will not be an ‘overnight’ super cycle. While the ‘super cycle’ will take some time to develop and will require patience from investors as production and supply issues are resolved, we ultimately believe this bullish thesis will play out in FY18 and be a major catalyst for Apple’s growth and stock going forward despite some near-term bumps.”

Ives is not the only bull by a long shot rooting for Apple’s massive success, especially considering TipRanks analytics reveal AAPL as a Strong Buy. Out of 29 analysts polled by TipRanks in the last 3 months, 22 are bullish on Apple stock while 7 remain sidelined. With a return potential of 12%, the stock’s consensus target price stands at $176.61.

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