Apple Inc. (NASDAQ: AAPL) is set to unveil the next generation of iPhone in its trifecta of iPhone 11s, which represent the next step in the company’s ability to put a fence around its unparalleled consumer installed base. As a result, one key analyst gave some perspective on what to expect from this announcement coming on Tuesday.
Wedbush reiterated an Outperform rating with a $245 price target, implying an upside of nearly 15% from the most recent closing price of $213.26.
With roughly one-third of the company’s 900 million active iPhones globally currently in a “window of an upgrade opportunity” over the next 12 to 18 months, it’s obvious that a crucial product cycle is on the horizon. Wedbush believes this could translate into roughly 180 million iPhone units sold in the fiscal 2020 full year.
The boutique investment firm believes Apple’s supply chain is planning on 75 million units for the initial iPhone 11 launch period, which is a slight uptick from its prior iPhone cycle last fall. The firm notes there is capacity in the supply chain to bring this launch period unit range production up to 80 million iPhones, depending on the level of pent up demand/preorder activity starting in mid-September.
Wedbush even went as far as to comment on the trade war with China:
With Apple caught in the crossfire on the US/China trade battle over the last six months the company (and its investors) are highly anticipating this iPhone 11 slate of smartphones to stimulate demand especially in the key China region. To this point, based on our analysis we believe roughly 60 million to 70 million consumers are due for an upgrade in the key China region which will be a major focus with the base iPhone 11 (replacing the XR) bringing enhanced memory, second back camera (dual lens) functionality, and a handful of other improvements.
The main spotlight of this week’s launch will be the flagship iPhone 11 Pro and the iPhone 11 Pro Max, as these smartphones represent the crux of improvements coming in this year’s releases. Expected price points look to be $749 for the base iPhone, $999 for the iPhone 11 Pro and $1,099 for the iPhone Pro Max.
The new triple camera lens technology in iPhone 11 Pro that will work in unison for users taking pictures, along with some next generation AI capabilities built into this year’s iPhones will be the key specs showcased. The video capability on iPhone 11 Pro versions will be significantly stepped up, with real-time re-cropping technology that appears to be quite impressive in Wedbush’s opinion.
Shares of Apple traded at $216.15 on Monday, in a 52-week range of $142.00 to $233.47. The consensus price target is $223.74.