- Apple stock could soar 38% as consumers opt for the higher-priced iPhone 14 Pro, according to Wedbush.
- Wedbush analyst Dan Ives said internal checks suggest 80% to 90% of iPhone 14 orders will be for the $1,000+ Pro models.
- "We already are seeing delivery times push to mid-October for many Pro models and most pre-orders are now looking at 3-4 week deliveries and quickly pushing out," Ives said.
More and more consumers are buying Apple's premium iPhone Pro models, and that's a good sign for its stock price, according to a weekend note from Wedbush analyst Dan Ives.
He said pent-up demand for Apple's upcoming iPhone 14 launch has led to pre-orders surpassing last year's iPhone 13 models, with delivery times already being pushed back to a month at least.
"We already are seeing delivery times push to mid-October for many Pro models and most pre-orders are now looking at 3-4 week deliveries and quickly pushing out. So far demand and orders for iPhone 14 are tracking slightly ahead of iPhone 13 and are tracking ahead of our expectations out of the gates," Ives said.
What's more is that the iPhone 14 Pro models, which cost at least $1,000, are seeing the bulk of the interest from consumers. Ives estimates that the iPhone Pro and Pro Max models will make up a "very heavy mix" of overall iPhone sales, representing upwards of 80% to 90% of the sales mix.
Helping boost consumers' decisions to buy the more expensive iPhone model are deep discounts from telecom carriers that hope to lock-in their customers for many years of service. Carrier deals listed on Apple's website showed AT&T and T-Mobile offering up to $1,000 in credit after trading-in an old phone.
Ives expects the trend of consumers opting for the higher-priced Pro models to extend to China sales, estimating that about 30% of Chinese iPhone consumers are in the window for an upgrade, "with many likely Pro/Pro Max buyers."
"At this pace we can see many Apple stores having Pro shortages by late September/early October," he said, reiterating his view that Apple placed an initial order with Asian suppliers for 90 million iPhone units.
"This speaks to the underlying demand story that Apple anticipates for this next iPhone release with our estimates that 240 million of 1 billion iPhone users worldwide have not upgraded their phones in over 3.5 years."
Strong sales of Apple's premium Pro iPhone models would boost its average sales price, a closely watched metric by Wall Street analysts as it tends to track closely with Apple's overall profit margins. Apple makes more money on the higher-priced iPhone sales compared to its lower-cost base models.
That potential boost to profits driven by a heavy mix of iPhone Pro sales gave Ives confidence in his Outperform rating and $220 price target for Apple stock, representing potential upside of 38% from Friday's close. Apple stock traded up 3% in Monday trades.