Demand For iPhone 6 Better Than Expected: Analyst

Even though Apple Inc. AAPL’s stock is slumping since Monday, one thing that is not slumping is the sales forecast for the company’s new iPhones.

Michael Walkley, senior equity analyst at Canaccord Genuity, was recently on CNBC to discuss the sales expectations of the iPhone 6 and the downfall in Apple’s shares.

“Our crux of our call today is the demand for the 6 is better than expected on two vectors, one is that we are just seeing a stronger mix towards the higher ASP products, a lot more consumers are choosing the 64-gig skew versus the 16-gig skew. So, we think that helps Apple and their ASPs and margins and the surveys are indicating much stronger mix to the new iPhone 6 products relative to the iPhone 5s […],” Walkley said.

“iPhone is the highest margin product of Apple’s hardware products, for the extra $100 you pay for the memory skew, that’s very high incremental growth margin dollars for Apple. We think that the higher mix (relative) to prior cycles helps the overall ASPs and then the gross margin dollars for Apple which flew through to take up margins. So, we think their gross margins could be closing on 40% for the entire company.”

When asked about analysts who are bearish on Apple for the coming quarters, Walkley said, “I think, those are all fair things to debate, the one thing that we’ll say that’s a little different is what we are seeing […]is this upgrade cycle is more sustainable and powerful than the past two other survey cycles as our surveys are indicating […]”