iPhone X will 'make or break' Apple shares over the next year, says Gene Munster

Apple's success over the next year will depend heavily on how the iPhone X fares. Ultimately, we think it's a make or break story for Apple.

The iPhone mix and average selling price (ASP) will be the biggest driver of Apple shares in the next year, which we expect to be favorable to the overall growth story. At first take, the $1,000 starting price for the phone feels like a deal-breaker.

But we think that's a fallacy. Consumers will take a step-function jump in what they're willing to spend on an iPhone given most buy their phones in installment plans.

We also just raised our estimates for fiscal year 2018, upping our iPhone average selling price to $740, ahead of the $722 estimate, as well as our revenue and earnings per share projections. Higher ASP's mean upside to Street estimates.

When preorders for the $1,000 iPhone model opened in the early morning hours on Friday, demand looked strong right out of the gate. Lead times were at five to six weeks, in line with our expectations of four- to six-week lead times by 8 a.m. ET on Friday.

Long lead times are attributed to bottlenecks in production, like its screen and TrueDepth camera. Based on previous years, we expect little change in lead times over the next week.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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