On Monday, a report from Jefferies indicated that despite an increase in the trade-in values of older iPhone models, sales for the new iPhone 16 have not seen a corresponding uptick.
The analysis conducted across five markets revealed that the official trade-in prices for the iPhone 15 Pro (P) and Pro Max (PM) as a percentage of the iPhone 16 P/PM's average selling price (ASP) have risen approximately 4 percentage points year-over-year.
According to InvestingPro data, Apple currently trades near its 52-week high of $250.80, with the stock showing signs of being overvalued based on its Fair Value analysis. This increase contrasts with the trade-in values of the iPhone 14 P/PM as a percentage of the iPhone 15 P/PM from the previous year, with the exception of Hong Kong, where the ratio remained unchanged.
The research also highlighted that the trade-in values for models two generations older than the current release have seen a significant rise in all five surveyed markets, ranging from 3 to 10 percentage points. This suggests that customers trading in their iPhone 14 or 15 models for the latest iPhone 16 are receiving better value than they would have a year ago.
Despite these more attractive trade-in options, the anticipated boost in iPhone 16 sales has not materialized. The data implies a potential lack of consumer interest in Apple's latest innovations, labeled as Apple Intelligence. This lack of increased sales persists even with the improved trade-in incentives.
With a market capitalization of $3.75 trillion and revenue growth of 2.02% in the last twelve months, Apple maintains its position as a dominant player in the technology sector. InvestingPro subscribers have access to 16 additional key insights about Apple's financial health and market position.
Focusing on China, one of the key markets for Apple, the report from Jefferies speculates that the company may resort to more aggressive discount strategies in the first quarter of 2025. This approach would be similar to the tactics employed in the first quarter of 2024, aiming to stimulate demand and improve sales figures in the region. The anticipation of such measures reflects the challenges Apple faces in invigorating its sales amidst a competitive market landscape.
Investors can access detailed analysis of Apple's market position and future prospects through the comprehensive Pro Research Report, available exclusively on InvestingPro, with the next earnings announcement scheduled for January 30, 2025.
In other recent news, Apple Inc (NASDAQ:AAPL). has been the subject of significant developments. The tech giant has plans to initiate AirPods production in India by early 2025, marking a strategic shift away from Chinese manufacturing. This move follows the company's successful assembly of iPhones in the country.
Simultaneously, Apple has received an upgraded stock price target from Baird due to its robust execution and strong free cash flow generation. Morgan Stanley (NYSE:MS) has also maintained its Overweight rating on Apple, citing the company's strong performance and potential for earnings growth.
In line with its strategy to control more of its hardware, Apple is set to introduce its own Bluetooth and Wi-Fi chip, known as Proxima, in 2025. This development will replace similar components currently supplied by Broadcom (NASDAQ:AVGO) Inc.
Furthermore, Apple recently reported a record-breaking total revenue of $94.9 billion for the final quarter of 2024 and announced plans to invest $1 billion in a new manufacturing facility in Indonesia.
Lastly, according to Nigel Green, CEO of deVere Group, Apple is among the tech companies known as the Magnificent Seven, which are expected to maintain market dominance into 2025 due to their innovative capabilities and consistent track record of outperforming market projections.
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