Apple’s iPhone 15 launch upgrade cycle to surprise to the upside, says Wedbush

Wedbush lifted its price target on Apple on Wednesday to $240 from $230 and reiterated its ‘outperform’ rating as it reckons the iPhone 15 launch upgrade cycle will surprise to the upside.

"Apple's iPhone 15 launch event was overall an impressive event which in our opinion lays the groundwork for a major upgrade cycle over the next year that will surprise the Street to the upside," said Wedbush.

It also said that its Asia supply chain checks this week give it increased confidence that iPhone units should be roughly 85 million out of the gates and could be close to 90m as "eye-popping carrier promotions on the horizon will be a major catalyst for upgrades into holiday season".

Wedbush said the lack of a price increase on iPhone Pro Max while a surprise will result in an incremental 8m to 10m units globally during this launch cycle.

"We believe iPhone units should level out in the 225 million unit range in FY24 and a rising ASP lift which is being underestimated by the Street as Cupertino has a massive pent-up installed base upgrade cycle now underway," it said.

Wedbush argued that worries about China’s government ban are "way overdone".

"This week we spoke to a number of Chinese industry contacts to better decipher the loud noise around the iPhone government China ban that has been an albatross around the Apple story over the past week," it said.

"We believe this is a very limited warning shot in very select government agencies in China that will have a negligible impact on Apple's China growth over the next year."

It said that while the Huawei smartphone launch and nationalism in China are headline risks - and have been for the last five years - checks in China continue to give Wedbush a high level of confidence "the bark is way worse than the bite given Street panic running rampant on this issue".