In a research note sent to clients on Thursday, UBS analyst David Vogt reports that a survey of more than 7,000 smartphone users in the U.S., China, Germany, the U.K., and Japan found strong iPhone demand with 22% intending to buy iPhones within the next 12 months, the highest percentage in five years.
In addition, iPhone retention rates—the number of people who intend to stay on the platform when they switch phones—reached 86%, the best reading in seven years. Interest in 5G wireless is “modestly improved,” he writes, consistent with Apple’s view that we are in the early days of 5G adoption. As a result, Apple’s current stock price “does not reflect the stickiness of the Apple ecosystem,” he says.
Vogt adds that every region showed a “solid” year-over-year increase in iPhone purchase intent, other than China, which was flat.
The UBS analyst also stresses that strong iPhone demand has spillover effects on other Apple products and services. The survey also asked about the Apple Watch. About 37% of respondents said they were likely or somewhat likely to buy a smartwatch over the next 12 months, while 80% were aware of the Apple Watch.
Vogt maintains his Buy rating and $155 price target.
MacDailyNews Take: Echoing Morgan Stanley’s Katy Huberty who said on Wednesday that strong iPhone demand runs counter to Apple’s recent stock performance.