Apple Inc (AAPL) Stock Price Target Raised After Strong iPhone 6 Demand in China, iPhone 6 Plus Sales
Apple Inc's stock price is predicted to reach $125 per share after a new survey has revealed strong sales for the iPhone 6 Plus. The global survey conducted by the UBS Evidence Lab also point indicates a strong demand in China. Due to the market's favourable response to Apple's biggest iPhone to date, UBS has raised its price target for Apple stock.
Analyst Steven Milunovich published the results of the UBS survey and raised his own price target for Apple shares to $125 from the previous projection of $115. In a report by Apple Insider, Milunovich said the UBS survey iPhone 6 demand could reach 190 million units through December 2015. About 4,000 people participated in the survey and came from the U.S., UK, Italy and China.
Milunovich was surprised to find that the respondents preferred the iPhone 6 Plus to its 4.7" sibling. Results showed that demand for the iPhone 6 Plus is greater in China and half of the total number of respondents who were planning to buy an iPhone wanted the 5.5" version. However, the analyst does not expect the iPhone 6 Plus to sell more than the iPhone 6 but the demand for the bigger iPhone may be greater than previously thought.
Those who responded to the survey indicated they want to purchase the 64GB iPhone, which can further increase Apple's average selling price. The high demand for Apple's iPhone 6 Plus can also add to its ASP. About one-third of respondents who were interested in buying an iPhone currently own Samsung phones. This leads Milunovich to believe that Apple's latest iPhone cycle could help the company attract more customers as Android users switch to iOS.
The UBS survey also suggested that Apple has the highest retention rate of 84 percent in China compared to Samsung and Xiaomi. About 70 percent who bought the iPhone 6 would likely use Apple Pay, the company's mobile payment system.
Canaccord Genuity analyst Michael Walkley said in a note to investors that October surveys in the U.S. revealed both the iPhone 6 and iPhone 6 Plus were the best-selling smartphones in all U.S. carriers and all channels where they are available. He noted demand had exceeded supply earlier in the month.