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Sept. 29, 2022, 9:24 a.m. EDT

Forget iPhone 14 demand fears: Consumers ‘love’ Apple’s latest device, analyst says in upgrade

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By Emily Bary

Never mind rumored iPhone 14 production cutbacks: Rosenblatt Securities says that Apple Inc.’s latest iPhone lineup seems to be resonating.

A day after Apple Inc. /zigman2/quotes/202934861/composite AAPL +1.01% shares fell amid a report that the company wasn’t moving forward with plans to increase iPhone 14 production as it didn’t see the demand surge it once expected, Rosenblatt’s Barton Crockett upgraded Apple shares to buy from neutral.

He titled his note to clients: “Our Survey Says Consumers Love It.”

Crockett surveyed more than 1,100 U.S. adults and found “substantial interest” in Apple’s higher-end introductions such as the iPhone 14 Pro Max and the Apple Watch Ultra.

Some 29% said they already had purchased a new iPhone 14 model or planned to do so in the next year. Among people who said they expected to buy the iPhone 14, 40% were leaning toward the iPhone 14 Pro Max, Apple’s most expensive offering, while 26% thought they would get the iPhone 14 Pro, the next most expensive device.

“We see reason to believe that consumers in other countries share this enthusiasm, prompting us to embrace more constructive near-term and long-term estimates,” Crockett wrote.

He added the caveat that buying intent doesn’t always translate to actual sales, but he nonetheless saw “a constructive demand backdrop, especially given rising macroeconomic pressures.” Crockett noted that 35% of respondents said that economic issues weren’t affecting their iPhone 14 interest.

Like several other analysts, he wasn’t fretting the recent Bloomberg News report saying that Apple was telling its suppliers not to go ahead with plans to increase iPhone 14 production by up to 6 million units as the company was instead aiming for production levels consistent with last year. Apple didn’t respond to MarketWatch’s Wednesday request for comment on the report.

“Bloomberg’s report yesterday that Apple was walking back previous guidance to suppliers for a modest bump to 2H22 production back to an original target of flat should be read in the context of consumers’ clear preference for the pricier models with higher [average selling prices],” he wrote. “There is also a recent history of comparable reports proving to be misleading when actuals come out.”

UBS analyst David Vogt also highlighted demand for the higher-end iPhone 14 Pro line in a Wednesday note to clients, writing that wait times for those models are still stretched.

“While availability in key markets like the U.S. and China eased roughly 3 days across the portfolio relative to last week, wait times remain elevated compared to the year-ago period for the Pro Max, a positive sign for demand and [average selling prices] in our view,” he said.

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