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.