iPhone Demand Remains High Despite Technology Market Slowdown, Say Analysts

iPhone demand this quarter has thus far remained "surprisingly resilient" despite the widespread supply chain issues and other factors affecting the tech industry, according to Wedbush analysts Daniel Ives and John Katsingris.

Apple iPhone 13 colors lineup 2022
Summing up their research findings in a new investor note, the market analysts said Apple's flagship devices had been holding up well despite "compression across the board in tech" and fears of a growth slowdown rising, as reflected in Apple's reduced share price.

The albatross for the June quarter in our investor conversations over the past month have naturally been the Covid lockdowns in China which will negatively impact revenue by between $4 billion and $8 billion as a headwind according to Cook & Co.'s guidance given last month.

As of now we believe iPhone demand is holding up better than expected (despite the various supply issues that have plagued Apple and the rest of the tech sector) and are trending better than management's guidance thus far in the quarter.

Apple last month said that lockdown disruptions in China and silicon shortages would continue to make it difficult to make enough product to satisfy strong consumer demand as the year progresses, and that this would ultimately affect Apple's June quarter revenue.

Wedbush said lockdowns and supply chain issues should be "peak worry" in the June quarter, but that then they would subside into the key September and December quarters on the heels of Apple's iPhone 14 launch.

We believe the initial bogey and production plans for iPhone 14 should be up modestly from iPhone 13 out of the gates which speaks to Apple's confidence that pent up demand for this next release remain healthy despite the jittery macro.

Wedbush analysts claim the stickiness of Apple's upgrade cycle is being underestimated by investors and Apple's installed user base will be key to ‌iPhone 14‌ sales this year, with almost a quarter of the 1 billion iPhones in general circulation having not been upgraded for roughly 3.5 years.

On top of this advantage Apple holds over rivals, Wedbush expects Apple's services business to account for roughly $80 billion of annual revenue this year and is set to grow at a "steady double- digit clip" into 2023. "We believe Apple's services business is worth alone north of $1 trillion which coupled with the flagship hardware business makes the risk/reward very compelling at current levels," said the analysts.

Tag: Wedbush

Top Rated Comments

Aluminum213 Avatar
20 months ago
My self esteem is low and I badly need that new iPhone 14 Pro
Score: 6 Votes (Like | Disagree)
44267547 Avatar
20 months ago
Well, what we do know is, the average consumer won’t likely prioritize purchasing a ‘new’ iPhone with inflation the way it is currently with the economy average I believe at ~8.4%.

I suspect the last thing consumers will do, is spend their money on superfluous tech they don’t need, which means they will retain their current smart phone for a longer duration, especially if said person is making payments on it.
Score: 4 Votes (Like | Disagree)
Abazigal Avatar
20 months ago
That's one of the upsides of Apple products offering that unique experience. If a particular product isn't in stock, chances are the consumer will simply wait for supply to eventually catch up, rather than opt for an alternative offering. Eg: people are willing to wait months for their M1 MBP to ship rather than buy a windows laptop that's currently available.

So it just means deferred sales, not lost sales.
Score: 3 Votes (Like | Disagree)
DelayedGratificationGene Avatar
20 months ago

Well, what we do know is, the average consumer won’t likely prioritize purchasing a ‘new’ iPhone with inflation the way it is currently with the economy average I believe at ~8.4%.

I suspect the last thing consumers will do, is spend their money on superfluous tech they don’t need, which means they will retain their current smart phone for a longer duration, especially if said person is making payments on it.
The carriers now are so desperate on keeping you that they give you a free iPhone for your old iPhone every year. Same thing with iPhone 14 etc…so there’s no question about upgrades anymore.
Score: 1 Votes (Like | Disagree)
svish Avatar
20 months ago
Demand will always be there for an iPhone!! iPhone always sells.
Score: 1 Votes (Like | Disagree)
44267547 Avatar
20 months ago

The carriers now are so desperate on keeping you that they give you a free iPhone for your old iPhone every year.
Which carriers are giving ‘free’ iPhones every year? And if so, which iPhone model are you inferring that’s free?

I’m not buying into the ‘desperation’ part of your post. There’s no loyalty to a carrier from a consumer standpoint (With the exception the device needs to be fully paid) or vice-versa, when they recruit new customers all the time. However, they have some really lucrative promotions ‘mid-cycle’, like “$800 for trade-in” on certain models was a recent promotion through Verizon.
Score: 1 Votes (Like | Disagree)

Popular Stories

iOS 17

iOS 17.2 Will Add These 12 New Features to Your iPhone

Friday December 1, 2023 12:19 pm PST by
iOS 17.2 has been in beta testing for over a month, and it should be released to all users in a few more weeks. The software update includes many new features and changes for iPhones, including the dozen that we have highlighted below. iOS 17.2 is expected to be released to the public in mid-December. To learn about even more features coming in the update, check out our full list. Journal ...
iOS 16 4 Web Push

Apple Confirms Governments Using Push Notifications to Surveil Users

Wednesday December 6, 2023 5:06 am PST by
Unidentified governments are surveilling smartphone users by tracking push notifications that move through Google's and Apple's servers, a US senator warned on Wednesday (via Reuters). In a letter to the Department of Justice, Senator Ron Wyden said foreign officials were demanding the data from the tech giants to track smartphones. The traffic flowing from apps that send push notifications...
airpods pro 2 pink

Apple Releases New AirPods Pro 2 Firmware

Tuesday December 5, 2023 11:28 am PST by
Apple today released new firmware update for both the Lightning and USB-C versions of the AirPods Pro 2. The new firmware is version 6B34, up from the 6B32 firmware introduced in November. Apple does not provide details on what features might be included in the refreshed firmware beyond "bug fixes and other improvements," so it is unclear what's new in the update, but prior software releases ...
Beyond iPhone 13 Better Blue

'All-Screen' iPhone Under-Display Camera Enters Development

Wednesday December 6, 2023 2:03 am PST by
Apple's Korean suppliers have begun developing smartphone under-display cameras (UDC), paving the way for the first iPhone with a true "all-screen" appearance. According to The Elec, LG Innotek has entered the preliminary development of the UDC, which sits under the display and does not result in a visible hole in the panel when the camera is not in use. A UDC differs from a typical front ...
magsafe blue 2

iOS 17.2 Brings Qi2 Support to iPhone 13 and iPhone 14 Models

Tuesday December 5, 2023 11:04 am PST by
The iOS 17.2 update that Apple is set to release to the public in the near future will bring support for the next-generation Qi2 wireless charging standard to the iPhone 13 and iPhone 14 models. Qi2 was mentioned in the release notes for the RC version of the update that came out today. With the addition of support for the new standard, iPhone 13 and iPhone 14 models will work with Qi2...
iphone se 4 modified flag edges

iPhone SE 4 May Reuse Existing iPhone 14 Battery

Wednesday December 6, 2023 1:17 pm PST by
Recently, MacRumors has received details on the battery currently being tested on the upcoming fourth-generation iPhone SE, and the information corroborates previous findings in relation to the device. The iPhone SE 4, known by its device identifier D59, is expected to use the exact same battery found in the base model iPhone 14. Partially assembled prototypes of the next iPhone SE have been ...
airpods pro bulbs

Black Friday Prices Return for AirPods Pro 2 With USB-C, iPad, and More

Tuesday December 5, 2023 7:30 am PST by
Today we're tracking a collection of deals that are matching - or nearly matching - the same all-time low discounts we saw during Black Friday. This includes the AirPods Pro 2 with USB-C, 9th generation iPad, and M1 MacBook Air. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a small payment, which helps us keep the ...
instagram messenger

Instagram and Facebook Messenger Chats to Disconnect This Month

Tuesday December 5, 2023 1:57 am PST by
Meta has revealed plans to end Instagram users' ability to chat with Facebook accounts later this month, rolling back a feature that it introduced over three years ago. In September 2020, Meta (then Facebook) announced it was merging its Facebook Messenger service with Instagram direct messaging, allowing Instagram users to chat with Facebook users and vice versa using the same platform....