Apple Inc. has become the center of attention on Wall Street as analysts closely monitor the demand for the new iPhone 16 amidst aggressive holiday season promotions by wireless firms, particularly Verizon Communications. The key question is whether the new “Apple Intelligence” artificial intelligence features included in the iPhone 16 models will significantly drive consumer demand.
The company is set to roll out its iOS 18.2 update in December, which includes these AI features. On Monday, Apple stock rose 1% to close at $239.59, breaking out of a flat base with a buy point at $237.49. This emerging flat base is 7% deep, a positive sign compared to the prior 13-week consolidation which was 17% deep.
Wedbush analyst Daniel Ives commented, “Black Friday officially kicks off an important holiday season for Apple as its flagship iPhone 16 represents the beginning of its Apple Intelligence launch with the release of 18.2 iOS. Demand for the iPhone 16 has been slightly ahead or in line with expectations globally.”
However, UBS analyst David Vogt noted in a recent consumer survey report that iPhone demand appeared soft as interest in AI features remains limited.
iPhone 16 demand and promotions analyzed
Craig Moffett from MoffettNathanson highlighted significant promotional activities from wireless service providers, which are key sales channels for Apple. Verizon, in particular, introduced more aggressive trade-in offers, including accepting any smartphone in any condition. “Led once again by Verizon, the whole market has started offering promotional discounts with no trade-in required,” Moffett noted.
The extent to which these promotions will drive demand for the iPhone 16 remains uncertain. Apple has reported earnings of $1.64 per share on sales of $94.93 billion for the quarter ended September 28, exceeding analyst expectations of $1.60 per share on sales of $94.5 billion. On a year-over-year basis, Apple’s earnings rose 12%, with a 6% increase in sales.
Apple holds a Composite Rating of 91, which consolidates five proprietary ratings into a comprehensive rating. Additionally, the stock has an Accumulation/Distribution Rating of C, indicating moderate institutional buying. As the holiday season unfolds, investors and analysts will be closely watching the performance of the iPhone 16 and the impact of Apple’s AI features on consumer demand and the company’s overall financial results.
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