Apple (NASDAQ:AAPL) was in focus on Friday after investment firm Evercore ISI said sales of the iPhone 17 were off to a “solid start,” with potential for upside.
Shares fell 0.8% in premarket trading.
“Our annual survey of nearly 4K consumers around iPhone purchase intentions points to what we believe is the start of [a] better-than-expected iPhone refresh cycle, led by a strong lineup of products, particularly at the high-end,” Evercore analyst Amit Daryanani wrote in a note to clients.
Daryanani, who reiterated his Outperform rating on Apple and upped his price target to $290 from $260, said there has been an uptick in interest from respondents on the new camera, battery and screen in the iPhone 17, while artificial intelligence features saw a “notable decline.” “This is a key difference that should enable durability, as [last year] the interest was driven by Apple Intelligence that eventually disappointed,” he added.
Delving deeper, the iPhone 17 Pro and Pro Max continue to resonate with consumers, as 56% of respondents said they were planning to buy one of the two versions. That’s helping the average selling price, especially as consumers move towards higher memory configurations and Apple got rid of lower memory options.
Notably, trends for the iPhone Air remain “subdued,” with only 9% of respondents said they planned to buy an Air.
“While there is potential for demand to pick up, our sense is consumers are skeptical around the camera (one vs. 2/3) and battery life despite a differentiated design,” Daryanani explained. Lastly, Apple’s services continue to see strength, with four of the five services tracked rising, led by Apple Pay.
“…[We] think this may be the start of a strong iPhone refresh cycle, with positive trends across the portfolio, including reports of strong first week sales (T-Mobile citing [double-digit year-over-year] growth and reports of strong China sales),” Daryanani added. “We think Apple’s core strength remains concentrated in the Pro tiers, while the iPhone 17 appears to have exceeded initial expectations.”