The impact of the new coronavirus epidemic on Apple is only temporary and will not significantly affect the release of the 5G iPhone. Wedbush Securities reports today.
Wedbush Securities analyst Daniel Ives said in the report that the new coronavirus is not a permanent problem for Apple and the iPhone, but more a matter of time.
Ives believes that investors should pay more attention to the stability of Apple's services business and what the 5G "iPhone 12" will bring to consumers, rather than focusing on the short-term impact of the new coronavirus.
"This remains a major hand holding time for investors in Apple and clearly there will be some speed bumps along the way as Cupertino navigates the coronavirus outbreak, writes Ives." However, we continue to focus on the golden installed base, pent up iPhone upgrade demand activity, and 5G super cycle on the horizon as core components of our bull thesis, along with the $50 billion + annual services business. "
Ives believes that iPhone demand is still strong and many iPhone users are waiting for upgrade opportunities. Ives estimates that 350 million of Apple's 925 million user base are waiting for this window, requiring only catalysts like 5G.
The volume will be between 215 million and 220 million. If more optimistic, shipments may reach 231 million units, which will be the highest since the iPhone 6 was released.
In China, Ives still expects that the supply chain will begin to reach full capacity in late April or early May.
For this reason, compared with the release window of previous years, Ives believes that the release date of 5G "iPhone 12" will not be delayed too long, at most a few weeks.
At the same time, China's iPhone demand will recover in the second and third quarters, in fact, the impact on demand will not be great.
For this reason, Ives continues to maintain Apple's target price of $400. Yesterday, Apple's stock price closed at $298.81, an increase of 9.31%, while it was quoted at $300.76 in pre-market trading today.
At the end of February, Morgan Stanley also issued a report that although the current public health and safety incidents have affected the production of iPhones in China and even the entire smartphone market, the impact is only temporary for Apple.
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