Improving adoption of Apple Inc’s (NASDAQ: AAPL) iPhone exchange programs create a sustainable competitive advantage for the company, according to Morgan Stanley.
Apple analyst: Katy Huberty maintained an overweight rating at Apple and raised the price target from $ 340 to $ 419.
Apple’s thesis: IPhone exchange programs can unlock $ 147 billion worth and finance a third of iPhone purchases in the next three years, according to Morgan Stanley’s AlphaWise consumer survey, Huberty said in a note Monday. (See their history here).
Although 48% of consumers now capitalize on exchange programs, the latest AlphaWise consumer device sustainability survey of 10,000 consumers in the US, UK, Germany, China and India shows adoption is on the rise, he said. the analyst.
If adoption increases to 77%, as the AlphaWise survey implies, affordability will improve by at least 10% in the next five years, increasing iPhone shipments by 6% in 2021 and by 3% in 2022, Huberty said.
Increased adoption and value of exchanges could speed up 5G updates, the analyst said.
The affordability of the iPhone will also improve significantly, “as recent reports suggest that Apple’s iPhone 5G prices will not materially change from its 4G predecessors while competitors are raising prices,” according to Morgan Stanley.
AAPL price action: Apple shares were trading 3.57% higher at $ 397.38 at press time.
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Photo courtesy of Apple.
Latest AAPL Ratings
| Date | Firm | Action | Of | TO |
|---|---|---|---|---|
| July 2020 | Morgan Stanley | Maintains | Over weight | |
| July 2020 | Wedbush | Maintains | Overcome | |
| July 2020 | Cascend | Maintains | To buy |
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