China could be the 'star' of the iPhone 11 show
China’s demand for Apple's iPhone 11 is off the charts ahead of Friday’s launch and could be the "star of the show," according to Wedbush Securities.
“We are seeing delivery times extend for iPhone 11 pre-orders across a range of colors and models this week, with our expectations now that iPhone launch units could exceed 75 million (original Street expectations were ~70 million) given underlying demand especially in China,” wrote managing director Dan Ives in a Tuesday note to clients.
He added that China’s demand for the iPhone 11 is “roughly double” what it was for the iPhone XR thanks to the lower price point, upgraded camera and new colors. U.S. demand is also robust, he said.
Strong demand in China is a welcome sign for Apple, which Ives has called the “poster child” of the trade war.
Trump in July shot down CEO Tim Cook’s request that Apple be shielded from the tariffs, saying the tech giant should make its products in the U.S. The tariffs, which were scheduled to hit products like iPhones and MacBooks on Sept 1., were delayed until Dec. 15 to give holiday shoppers some relief.
Apple last week announced three new iPhones (iPhone 11, iPhone Pro, iPhone Pro Max), upgrades to several products and said its streaming service would cost $4.99 a month, undercutting its rivals.
IPhone launches have generally been a positive catalyst for Apple shares, which have gained nine out of 13 times in the 60 days following such an event, according to an analysis from Bank of America Merrill Lynch.
Apple shares settled at $214.17 on Sept. 9, the day ahead of the iPhone 11 launch. They finished at $220.70 on Tuesday.
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Ives has an “outperform” rating and $245 price target – 14.4 percent above where shares settled Tuesday.