Munster: Ignore the shorter lines, Apple is experiencing "slight growth" in iPhone 7 demand
For example Piper Jaffray estimates that 400 people were waiting outside Apple's 5th Avenue flagship store in the Big Apple on Friday morning. That compares to the 650 that were outside the store during last year launch date, and the 1,880 that lined up outside the store in 2015 for the release of the Apple iPhone 6 and Apple iPhone 6 Plus. This morning, only 30 hearty souls took a place in line outside the Apple Store on Apple's Cupertino campus.
But the lines really don't serve as an indicator of iPhone demand anymore. The carriers have their own deals and are increasingly hijacking iPhone orders away from Apple. Carrier pre-orders were strong this year, especially at Sprint where reservations were up earlier by 375% year-over-year. T-Mobile says that its pre-orders were up 400% from 2014's figures. Driving these increases is the free 32GB Apple iPhone 7 deal that every carrier is offering in one form or another. The bottom line is that the consumer has to pay $650 in advance for the 'free' iPhone 7, and is reimbursed on a monthly basis usually via a bill credit. Because the reimbursement takes 24 months to complete, guess what? You're locked in for 24 months. Funny how that works.
Munster has an overweight rating on Apple's shares with a target of 151. The stock closed today at $114.92, down 65 cents or .56%.