Market Overview

Survey: Apple's Share Of Smartphone Market Remains At All-Time High

Survey: Apple's Share Of Smartphone Market Remains At All-Time High

Amid bearish predictions concerning Apple Inc. (NASDAQ: AAPL) and its flagship iPhone, one analyst at Baird remains upbeat on the company's  prospects.

The Analyst

Analyst William Power reiterated an Outperform rating on Apple with a $185 price target.

The Thesis

Apple's iPhone share continues to remain strong despite slowing smartphone purchase intent, Power said in a Tuesday note, citing Baird's semi-annual U.S. Apple survey.

Roughly 15 percent of respondents said they plan to purchase a smartphone in the next two months, a slight decrease from the previous two surveys. This was confirmed from the fourth-quarter upgrade rates at carriers, the analyst said. 

Apple's share remained at the highest level ever, with 67 percent of respondents who plan to buy a new smartphone planning to purchase an iPhone, Power said. With the majority of iPhone owners claiming to be using a model over two years old, the analyst said he sees potential in the likelihood of these owners upgrading at some point.

Underlining the strength of the Apple ecosystem, iPhone users own an average of 2.6 devices, Power said. 

Among other products and services, Baird noted growing Watch penetration; domination of the App Store and iCloud among Services; further share gains for Apple Music; and the potential for Services to emerge as a long-term opportunity.

When asked about the Service Apple owners desire most, a live TV service ranked first, followed by a Netflix, Inc. (NASDAQ: NFLX)-like service, the analyst said. 

"Over 18 percent of respondents expressed some interest in subscribing to an Apple video streaming service."

The Price Action

Apple shares have added about 11 percent year-to-date.

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Photo courtesy of Apple. 

Latest Ratings for AAPL

Oct 2020Raymond JamesMaintainsOutperform
Oct 2020Piper SandlerMaintainsOverweight
Oct 2020Credit SuisseMaintainsNeutral

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