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Evercore ISI analysts said Apple (NASDAQ:AAPL) iPhone Pro demand has remained strong and “in stark contrast to concerns around a slowdown.”
The analysts, who have an Outperform rating and $190 price target on the stock, did, however, tell investors in a research note that lead times for the Pro models are currently coming in at 31-45 days across all the geographies they track (vs. 32-36 days on 11/17).
“Our assessment is that a short extension in lead times is unlikely to cause consumers to exit the AAPL ecosystem and we expect demand to be deferred rather than lost. Assuming the plant operates at ~50% capacity for 7-14 days, this could push out ~$3B of iPhone revenue from the Dec-qtr to the Mar-qtr,” they wrote.
They acknowledged that there is still some risk things take longer than expected to improve, but they believe iPhones are poised to see a higher ASP uplift given the mix shift towards the Pro models and that total demand is stronger than expected.
“All delivery times referenced are for delivery of a “sim-free” phone from the Apple website. We would also note that delivery times referenced here represent the free delivery option, though in the U.S., some iPhone 14 models can be delivered faster should the customer choose to pay an extra delivery fee. Across all the geographies we track, lead times for the lower-end iPhone 14 Plus and iPhone 14 models are noticeably lower at 1-5 days,” the analysts added.
They also commented that demand is relatively weaker for the lower-end segment of the iPhone market compared to the Pro models.
