iPhone 14 Demand is Off The Charts. Will It Be Available for Christmas?
Sep 22, 2022
On September 16, Apple made the iPhone 14 available for purchase in shops, along with other new goods such as the Apple Watch Series 8. The new iPhone comes in four models: the standard iPhone 14, the iPhone 14 Plus, the iPhone 14 Pro, and the iPhone 14 Pro Max. It's only been a few days since the phone's debut, but demand has been great, particularly for the high-end versions of iPhone 14 Pro and Pro Max.
This came as a pleasant surprise to the organization. Given the present macroeconomic background, "there was speculation that [Apple] might face a demand crisis rather than a supply problem." "Now, [Apple] has the polar opposite of what many expected," the analyst added.
And by the opposite, Ives means that the business may experience supply challenges for customers eager to purchase phones as gifts as the Christmas season approaches, prompting earlier orders.
"At this rate, by mid-November, there will be very little inventory in Apple shops or online," Ives said. "As a result, Apple will need to dramatically increase its supply of Pros over the next three to four weeks to begin meeting what may be strong demand around the holidays."
The appeal of high-end phones is unexpected in light of the fact that many people are experiencing record-high inflation, but it hasn't prevented customers from purchasing the $1,000 iPhone Pro. According to Ives, one reason for this is the enhancements in the iPhone 14 Pro versions above the standard model, including the enhanced camera. He also stated that many consumers were overdue for an iPhone update to begin with, and that carrier incentives were sufficient motivation to make the purchase.
"According to our calculations, 240 million of the world's 1 billion iPhone owners have not updated in more than 38 months." So there's a lot of untapped demand in terms of overall improvement," he explained.
Because carriers such as Verizon Communications and T-Mobile US provide trade-in incentives, Ives stated that "financially, it makes a lot more sense to go down the Pro route than the base model." When you add all of the promotions together, the Pro model is the route of least resistance."
Overall, Ives views customer enthusiasm for the new iPhone 14 Pro as a plus for the firm and maybe the stock.
"Tech continues to be under enormous pressure due to Fed rates and risk-off," he added. "However, I believe this is setting up for Apple to hold up much better than other tech companies and the wider market if this demand narrative continues, which we believe it will."
The stock of Apple is up 1% to $155.95 on Tuesday, while the S&P 500 is down 1.5%. The stock has dropped around 12% this year, although it has risen 2.4% since the closing on September 15, the day before the iPhone 14's release date.