Dan Ives: iPhone 17 Demand Exceeds Conservative Street Expectations

iPhone 17 Demand and Pre-Order Activity

• 📈 iPhone 17 pre-order activity is projected to be up approximately 5-10% year-over-year compared to the iPhone 16.
• ⚠️ China remains an "X variable" due to past regulatory concerns, but overall demand is expected to surpass conservative street estimates.
• 💡 The street's current expectations are considered too conservative, with some analysts predicting historic lows in growth.

Bullish Catalysts for Apple

• 📉 Market sentiment towards Apple is currently very negative, with many viewing the stock bearishly, suggesting a potential for numbers to improve and drive the stock higher.
• 🤝 The DOJ ruling against Google is seen as a positive catalyst, potentially reigniting a partnership between Apple and Google for AI integration.
• 🇨🇳 Tim Cook's engagement with Washington D.C. and positive interactions regarding tariffs have also been beneficial.

AI Integration and Future Growth

• 🤖 While internal AI development at Apple might be slow, the company is expected to leverage external AI solutions, likely from Google's Gemini.
• 🚀 The DOJ ruling opens the door for Apple to partner with Google, avoiding the need for smaller acquisitions like Perplexity.
• 💡 A potential deal with Google is anticipated before year-end, setting the framework for future AI integration, which is crucial for Apple to not be left out of the "fourth industrial revolution."

iPhone Upgrade Cycle and Stock Outlook

• 💰 There is significant pent-up demand with an estimated 315 million iPhones due for an upgrade after four or more years, out of a total of 1.5 billion iPhones.
• 🎯 This pent-up demand suggests a stock that is likely to move higher in the coming weeks and months.
• 📈 The iPhone unit growth is now projected to be 7-8%, a significant increase from the previously baked-in expectation of 4-5%.

Strategic Partnerships and Future Deals

• 🤝 The partnership between Apple and Google is seen as mutually beneficial, with Google needing Apple's unparalleled install base.
• 💰 The current deal, estimated at $20 billion, is expected to re-up at a much higher valuation, potentially $30 billion or more.
• 🔒 While not entirely exclusive, the deal is considered semi-exclusive due to the significant strategic importance for both companies.