iPhone Demand Still Strong Leading Societe Generale To Upgrade Apple To Buy

Apple ’s shares have started the week off well, up about $14 or almost 3% to $523. Societe Generale, who had downgraded the stock just a month ago, raised its rating to Buy and Counterpoint Research published a report showing significant gains for the iPhone in the U.S. My tracking of the iPhone 5s still shows strong demand worldwide just before it launches in 25 countries on Friday and tomorrow is the announcement of new iPads. (Note that my family and I own Apple shares).

Counterpoint Research has iPhone's share doubling in the U.S.

Counterpoint Research released a report that shows the iPhone increasing its U.S. market share from 17% in August to 39% in September. Apple took the most share from Samsung with it losing its number one position and share decreasing from 37% to 29% along with LG and HTC losing ground.

Counterpoint research director Tom Kang said, “The key reason for this sudden jump in sales can be attributed to the big wave of upgrades due in this launch month from Apple’s huge installed base of iPhone users. This depicts a healthy replacement cycle and user base growth trends for Apple despite the array of Android devices launching from tens of OEMs every month.”

Source: Counterpoint Research

Societe Generale raised Apple to a Buy rating

Societe Generale's Apple analyst Andy Perkins upgraded the shares from Hold to Buy this morning after downgrading them on September 23. He had downgraded them based on the strong 9 million iPhone 5c’s and 5s’ first weekend demand cannibalizing 4S sales and his Discounted Cash Flow analysis generating a $500 price target.

His upgrade is based on greater iPhones sales in the September quarter than he had previously projected (30 million going to 34 million) and higher gross margins. I am estimating that Apple sold 36.3 million iPhones in the quarter with a 36.8% gross margin which has some support from Verizon’s 3.9 million iPhones being activated in September.

Perkins points out that Hon Hai and Pegatron , Apple’s two main iPhone manufacturers, showed a 20% year over year increase in sales in September and the value of handsets exported from China increased 30%. Below is a graph that shows the correlation between the value of China’s handset exports and Apple’s sales

He materially raised his fiscal 2014 gross margin from 42% to 44% (it was 36.9% last quarter) and to 46% in fiscal 2015. This increased his fiscal 2014 EPS estimate to $46.20 vs. the Street’s $43.12 and fiscal 2015 to $48.20. His price target is now $575.

If you want a Gold iPhone 5s buy it from Vodafone in Germany

The lead-times for the iPhone 5s have not changed much from Tuesday last week. The nine countries that Apple is selling the 5s have 2 to 3 week delivery timeframes with the Gold version still showing up as “Currently Unavailable” in Hong Kong and Singapore.

I also surveyed the three major U.S. Carriers ( AT&T , Sprint and Verizon) and Vodafone in the United Kingdom, Germany and Australia. Here is a link to the Google Doc where I have been monitoring 5s lead-times since September 20.

Of the U.S. carriers Verizon’s lead-times are the only ones that have been shortening. It has been keeping the same ship dates, which range from October 28 to November 11, as each day passes. This isn’t to say that AT&T and Sprint aren’t just keeping multiple week lead-times for many models to make sure they can keep their commitments to customers and ship sooner but Verizon’s constant dates is one indication that 5s availability could be getting better.

I started tracking Vodafone in the U.K. two weeks ago and its 5s lead-times have remained constant ranging from 2 to 4 days to 6 to 8 weeks for the Gold models.

I just started tracking Vodafone in Germany and Australia on Saturday and one small anomaly is that the Gold version is showing end of October availability in Germany which is sooner than any other site I have tracked.

Shares have broken through a resistance level

In mid-August Apple’s shares got to a high of $514 and in early September hit $508 before falling to $447 after the iPhone 5c/5s announcements. With today’s move it has broken through the $514 and $508 resistance levels and has continued to increase after the 50 day moving average crossed the 200 day moving average at $460 in early September.

Source: StockCharts.com

Follow me on Twitter @sandhillinsight. Find my other Forbes posts here.

Related on Forbes: