iPhone 6s Launch Signs Are 'Positive,' Daniel Ives Says

• Apple Inc. AAPL has seen a 7.53 percent increase in its share price over the past month.
• FBR’s Daniel H. Ives has maintained an Outperform rating and price target of $175 on the company.
• Ives believes that the initial underlying customer demand, prior to the launch of the iPhone 6s/6s+, appears robust and is likely to drive upside to the Street expectations.

Given that following the launch, the company would only be able to include two days of iPhone 6s and 6s+ sales in the September quarter, the bulk of the sales associated with Apple’s flagship product would be reflected in F1Q16.

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“Our Apple store checks over the last week, initial pre-order data based on wait times, coupled with our China market analysis give us confidence that Apple is on a trajectory to exceed Herculean-like YOY iPhone 6 comps in the December quarter,” Ives stated.

Given the initial pre-order sales, the potential $100 billion TAM in China and with less than 30 percent of the customers having upgraded to the iPhone 6 until now, along with the “innovative 6s model,” Ives believes that Apple would be on the path to growth in the coming quarters, which would “help reverse the negative investor tide.”

“In our opinion, the Apple upgrade plan/monthly payment strategy, combined with changes to carrier plans, has the potential to add further tailwinds to 6s growth in FY16… while potentially giving a slight lift to gross margins over the next few years,” the FBR report said.