China driving stronger year-over-year iPhone 13 demand, analyst says

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Investment bank Wedbush believes that iPhone 13 orders are about 20% ahead of the company's previous iPhone 12 lineup, driven in part by strong demand in China.

In a note to investors seen by AppleInsider, lead Wedbush analyst Daniel Ives says that iPhone 13 demand looks "robust out of the gates," with pre-orders in China leading the way in 2021. He notes that pre-orders in China have approached the 5 million or 6 million mark.

Although supply chain issues are a lingering concern for Apple and the broader smartphone industry, delivery estimates in the U.S. are tracking in-line with a stronger result than Apple's iPhone 12 launch in 2020.

The analyst also believes that iPhone orders are skewing toward the premium end of the spectrum, with models like the iPhone 13 Pro and iPhone 13 Pro Max driving Apple's average selling price (ASP) higher. That could result in overall top-line growth for Apple in the coming quarters.

Ives also notes that aggressive trade-in and financing programs could also sway iPhone owners who are currently on the fence.

Additionally, Ives believes that Apple could set iPhone unit builds between 130 million and 150 million. Wedbush supply checks suggest that iPhone 13 orders are currently in the 90 million unit range, which is higher than initial iPhone 12 reads that hovered around 80 million units.

The iPhone 13 lineup, in other words, is seeing a 10% build increase year-over-year right out of the gate.

The analyst reiterates his "super-cycle" thesis, based on the estimate that 250 million out of 975 million iPhone devices are set for an upgrade. He continues to believe that Apple's "super-cycle" will continue well into 2022.

Ives maintains his Outperform rating for Apple and his 12-month price target of $185. That's based on a sum-of-the-part valuation on his Apple 2022 estimates, and includes a 16x multiple on Services at $1.3 trillion and a 7x multiple on Apple's hardware at $2.1 trillion.