Apple Inc. (NASDAQ: AAPL) will launch its new iPhone 11 Friday, and the Street's original shipping estimate of 70 million units may be too low, according to Wedbush.

The Analyst

Daniel Ives maintained an Outperform rating on Apple with an unchanged $245 price target.

The Thesis

Delivery times for iPhone 11 pre-orders across multiple models and colors are extending outward, which implies that Apple could deliver more than 75 million iPhone units, Ives said in a Wednesday note. (See his track record here.)

Apple is seeing "robust" pre-order activity domestically, especially with the 256GB model, the analyst said.

Apple is also seeing notable strength in China, where pre-order activity is about double what it was for last year's iPhone XR launch.

Specifically, 60 million to 70 million iPhone users in China are looking to upgrade their devices, so now is an "integral time" for Apple to perform well, he said.

Apple's new devices are cheaper compared to last year's XR model, and this is the correct strategy at a time when Huawei and other China-based rivals are looking to win share from Apple, Ives said.

Globally, around one-third of the 900 million iPhone users haven't upgraded their devices in more than three years, and the new iPhone 11 is compelling enough for many to switch, the analyst said.

In total, Apple could ship 185 million iPhone units in fiscal 2020, and the company will look to further monetize these users through services, he said.

Bottom line, Apple is seeing momentum ahead of the iPhone launch "and defying many skeptics" who sounded the panic alarm over the past few months, according to Wedbush.

Price Action

Apple shares were trading up 0.16% at $221.05 in Wednesday's premarket session.

Related Links:

Details Emerge On Apple's iPhone Strategy In China

Apple's Stock Dips Lower After Goldman Sachs Lowers Price Target To 5

Photo courtesy of Apple.

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