Given the current uncertain macroeconomic environment featuring high interest rates and inflationary pressures, investors might expect Apple's (AAPL 0.87%) latest iPhone launch to fall flat. But iPhones are proving to be less of a discretionary expense than Wall Street anticipated. Over the last week, several analysts have observed that sales of new iPhones -- particularly the iPhone 15 Pro Max -- seem to be trending well.
Let's look at exactly why analysts are upbeat about the iPhone 15 lineup and what it means for the tech stock.
NASDAQ: AAPL
Key Data Points
iPhone could provide a lift for Apple stock
On Monday, a Morgan Stanley analyst said that the pre-order data it uses to gauge the new model's success indicates that there's been "a solid early start to the cycle," particularly as it relates to the most expensive new iPhone: the iPhone 15 Pro Max. Meanwhile, a Wedbush analyst said new iPhone pre-orders seem to be trending significantly better than expected, while a Credit Suisse analyst recently pointed out much longer lead times for iPhone 15 Pro Max orders.
The most recent analyst to chime in with bullish sentiment on the new iPhone was Goldman Sachs' Michael Ng. While acknowledging that there's very little visibility into iPhone supply, one thing is clear: Demand for the new lineup seems to be outpacing supply, he said in a note to investors this week.
Like the other mentioned analysts, Ng is bullish on the stock. He rates it a buy, with a $216 12-month price target. Analysts at Morgan Stanley, Wedbush, and Credit Suisse have targets of $215, $240, and $220, respectively.
With the iPhone accounting for more than half of Apple's revenue, it's obviously good news to see demand for the newest iPhones outstripping supply. Even more, with the pricier versions of the phone having the longest lead times, demand seems to be skewing toward the more expensive devices.
One reason to be cautious
But not all analysts are bullish. Barclays analyst Tim Long said that his channel checks on iPhone 15 pre-orders in China suggest a "difficult" sales cycle for the new lineup in the key market. Further, Long sees a slight shift toward the lower-priced iPhones in the new lineup, compared to last year's estimated mix in the country.
The analyst has a $167 12-month price target for the stock.
Helping justify the analyst's comparatively bearish sentiment for the stock, Apple's Greater China segment accounted for about 19% of its fiscal 2022 sales. So a tough sales cycle for iPhone in the large market could weigh on the stock.
But investors could also look at Long's channel check as a positive. He estimates that overall unit orders in the market are only down 5% year over year. Considering that the consensus about China in the media lately seems to be that a recovery has fizzled out and weakness is emerging, such a slight decline in the vital market means that any decline in iPhone sales in the region may do little to hold back potential strength in North America and other markets.
While no one can know precisely how iPhone sales are faring, it's good news that demand for the new devices seems to be outstripping supply, despite a challenging macroeconomic environment.
