Analysts say iPhone sales are still strong despite slowing demand in the technology market

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According to Daniel Ives and John Katsingris, analysts at Wedbush, iPhone demand for this quarter has so far been “quite resilient,” despite the extensive supply chain concerns and other challenges hurting the technology industry.

In a new investor note, market analysts summarized their results and noted that despite “compression across the board in tech” and mounting fears of a growth slowdown, Apple’s flagship smartphones had held up well, as shown by the reduced share price of Apple.

The elephant in the room in our investor meetings throughout the prior month was COVID’s lockdowns in China, which Cook & Co. predicted would have a negative impact on revenue of between $4 billion and $8 billion in the June quarter.

However, despite the supply concerns that have plagued Apple and the tech industry as a whole, we believe iPhone demand is holding up better than expected and is trending better than management’s projection so far this quarter.

Also read: Texas boy’s 31 cheeseburger order demonstrates why it is crucial to protect your iPhone

Apple stated earlier this month that it will be challenging to manufacture enough goods to match strong consumer demand as the year advances due to production problems in China and semiconductor shortages, and that this would ultimately harm Apple’s revenue during the June quarter.

Wedbush predicted that lockdowns and supply chain concerns would peak in the June quarter, but would subsequently decline in the September and December quarters following Apple’s iPhone 14 introduction.

iPhone 14’s production and bogey figures are expected to be somewhat higher than iPhone 13’s out of the gate, which indicates Apple’s belief that demand for its next release will stay solid despite the unsettled macroeconomic environment.

According to Wedbush, investors are underestimating the stickiness of Apple’s upgrade cycle, and this year’s iPhone 14 sales will rely heavily on Apple’s installed user base, with about a quarter of the 1 billion iPhones in general circulation having not been upgraded in approximately 3.5 years.

On top of this edge that Apple has over its competitors, Wedbush forecasts that Apple’s services sector will account for approximately $80 billion of yearly sales this year and is projected to rise at a “steady double-digit clip” through 2023. According to the analysts, “We believe Apple’s services company is worth north of $1 trillion; this, paired with the flagship hardware business, makes the risk/reward highly tempting at current levels.”

Also read: Half the smartphone market in North America was occupied by iPhones in Q1

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