iPhone Purchase Intent in China at 6-Year High: Analyst

According to a recent survey from investment firm UBS, purchase intent for Apple’s iPhone is at a six-year high in China following a year-over-year increase of nearly 6% (via Seeking Alpha).

UBS Analyst David Vogt said the survey results indicate that “the iPhone 13 series is driving share gains from local brands.” The analyst currently has a “buy” rating on Apple stock with a price target of $185 USD per share.

Fellow investment firm Wedbush Securities reported last week that Apple’s supply chain has remained “surprisingly resilient” despite the recent COVID-19 lockdowns and consequent production and logistics disruptions in China.

Wedbush analyst Daniel Ives also noted that Apple is uniquely positioned for explosive iPhone 14 sales since an estimated 240 million active iPhones have not been upgraded in the past 3.5 years, which may be another contributor to growing purchase intent.

In comparison to China, purchase intent in the U.S. was at a two-year low, down 4% year-over-year. Apple’s retention rates for the iPhone were strong in both regions, though, up 1% year-over-year in the U.S. to 87% and up 7% year-over-year in China to 78%.

Vogt also noted that the age of the iPhone base is “largely stable” at roughly 19.5 months across the globe with a healthy improvement in China, indicating “a modest positive for future demand.”

According to the UBS survey, purchase intent for the Apple Watch has also grown, up 3% sequentially and 3% year-over-year to 36%. “Intent increased in every region except Japan, with notable strength in China as 68% of respondents noted they were likely to purchase a smartwatch,” Vogt added.

China is one of Apple’s largest markets and is responsible for more than 90% of the tech giant’s manufacturing operations. Following the recent supply chain headwinds in the region, however, the Cupertino, California, based company is reportedly looking to diversify production. To that effect, Apple is urging suppliers to expand to China, Vietnam, and other Southeast Asian countries.

Apple’s stock price has dipped more than 20% from a high of $178.44 in March as part of a wider downtrend in tech stocks. At the time of writing, Apple stock is trading at $141.21 per share, up 2.63% in the day.