Tim Cook at the Apple launch event, March 8, 2022
Bank of America analysts on Wednesday said iPhone demand remained strong despite a recent report that Apple cut production of the new iPhone 13 and iPhone SE.
“While these articles may lead some investors to think that demand is risky, we believe that demand for iPhones remains strong based on our analysis of iPhone exchange prices,” the analysts said. Bank of America analysts said in a note.
Bank of America says Apple lowered the commercial value of some iPhone models after it launched the $429 iPhone SE in early March. An iPhone 12 Pro Max, the latest phone model, is currently priced at $650. compared to $700 prior to launch, the note said. Analysts say this shows that demand is still strong because Apple doesn’t need to pay a lot to convince people to trade in old iPhones for new models.
An Apple spokesperson was not immediately available to comment on the price change.
“This compares with 2019 when Apple offered high commercial prices against 3rd parties to promote upgrades,” the analysts said. “Separately, China has imposed another round of sanctions in Shanghai; however, as we have previously pointed out, companies that have learned to manufacture through COVID and Apple/Foxconn are likely to shift operations. production to other regions, and for now, we don’t expect a material impact from these outages.”
In another sign of strength for Apple’s new iPhone SE, Bank of America analysts said that a global survey the company conducted in January found that 25% of respondents still own iPhone 8 or earlier. Old iPhone users are the target audience of iPhone SE.
“We see this as an opportunity to promote an alternative cycle,” said Bank of America. “Apple may be targeting to upgrade these users to newer iPhones, which could be the reason why Apple is still accepting iPhone 6 and 6 Plus models for sale in China but not in the US and UK. .”
According to Bank of America, Apple could benefit from increasing the iPhone’s install base, which could then monetize improved services revenue. Apple’s services business grew 24% year-over-year to $19.52 billion in fiscal Q1.