Analyst expects 80 million iPhone units will be sold during holiday quarter

A note to investment clients from Wedbush analyst Daniel Ives was viewed by AppleInsider. In the note, Ives produces an estimate of how many iPhone units Apple might ring up during the current holiday quarter, which happens to be the tech giant's fiscal first-quarter for 2022. For the three months from October through the end of December, Wedbush's lead analyst forecasts that Apple will sell more than 80 million iPhone handsets.

Ives picks up on something that fellow investment firm J.P. Morgan noted earlier this month; delivery times for the iPhone 13 series continue to grow longer revealing that demand for the 2021 models remains strong. Ives calculates that demand is surpassing supply by 15%. The new iPhone 13 Pro variants are equipped with the ProMotion displays that update 120 times per second.

Apple bulked up the capacities of the new batteries that power the 2021 phones with the iPhone 13 Pro Max offering the best battery life of any iPhone ever made. The cameras have been upgraded and with Cinematic Mode, users can rack focus automatically. This is when the focus is used to emphasize two different people in the scene by having one in focus and the other out of focus, and then switching between the pair.

And of course, all four models are powered by the new 5nm A15 Bionic chip which sports a whopping 15 billion transistors.

In his note, Ives wrote, "Despite the chip shortage and Rubik's Cube logistics that Apple (and every other technology, auto, and retail vendor) is dealing with we are seeing tremendous demand trends both in the US and China for iPhone 13 which is a positive sign that Apple could exceed selling 80 million iPhone units in the quarter with stronger Pro versions driving higher ASPs." The average selling price (ASP) is an important metric since it gives the company and analysts an idea of whether the more expensive Pro models are in demand.

Looking at the smaller period of time between Black Friday and Christmas, Ives expects that Apple could sell 40 million iPhone units during those 29 days. All-in-all, the Wedbush analyst sees Apple enjoying a strong holiday quarter and delivering up to 100 million AirPods during the fiscal first quarter of 2022. He says that he has already detected signs that the true wireless earbuds are going to have a very strong quarter.

Obstacles in the way including the global chip shortage and the minefields in the supply chain are but road bumps in a supercycle that will run for a few years. The large number of active iPhone owners with older models provide a floor for iPhone sales, especially as faster 5G signals become more and more readily available not just in the states, but worldwide. Ives' note mentions that in China, there have been an estimated 15 million upgrades to iPhone 13 which would appear to be a positive sign for demand moving toward 2022.

With Apple shares currently trading at $151, the analyst has a price target of $185 which would require a hike of 22.5% from the current stock price. He calculates this by taking the valuations that Wedbush analysts have placed on different parts of Apple's businesses. For example, Apple's Services unit is valued at $1.3 trillion based on a multiple of 16 times revenue. Apple's hardware business is given a valuation of $2.1 billion using a lower multiple of 7.

While Apple no longer reveals the number of iPhone units shipped during a particular quarter, it does disseminate the revenue it garnered from the device during the three months. During the fiscal fourth quarter of 2021, which ended in September, Apple took in nearly $39 billion in revenue related to the iPhone. For all of fiscal 2021, that figure came to $192 billion.