Growth is driven by Apple’s installed hardware and services base despite challenges in Q3

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According to Wedbush, an investment firm, it is not probable that Apple will see substantial effects on its growth in 2022 despite the macroeconomic problems that were present during the June quarter.

Wedbush’s lead analyst, Daniel Ives, shared his thoughts on Apple’s June quarter performance and the company’s outlook for the year 2022 in a message to investors that was spotted by Apple Insider.

According to Ives, the primary topic of discussion among Apple’s investors is the rumored $4 billion to $8 billion loss that Apple estimates it will incur as a result of the COVID-19 lockdowns in China in the third quarter of 2022.

According to Ives’ report, Chinese supplies appear to be improving. Analysts are confident that demand for iPhones will remain strong despite the numerous supply chain concerns facing Apple and the industry.

Also read: Apple report suggests that a launch date has been set for the M2 MacBook Air

Nevertheless, the June quarter is expected to be affected. Investing in the iPhone 14 in the fall is a good idea, according to Ives, because he expects it to have flat or slightly higher shipments than the iPhone 13.

It is possible that Apple’s installed base and services will be the keys to surviving the storm, despite current socioeconomic conditions.

Ives predicts that 240 million current iPhone users haven’t updated to a new phone in 3.5 years, which represents untapped market potential. Services, according to the analyst, are expected to rise at a “double rate” through 2023, bringing in an estimated $80 billion in revenue per year.

According to his writings, “although the apprehensive market backdrop is creating a scary environment for tech equities, we believe Apple’s growth story is well intact despite the fragile macro.”

An outperform rating and a target price of $200 remain in place for Apple, according to analyst Ives. A sum-of-the-parts valuation of his 2022 predictions yields an 18x multiple for services at $1.5 trillion and a 7x multiple for Apple’s hardware division at $2.1 trillion.

Also read: App developers can now pay third parties after Apple bends to South Korea’s demands

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