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Apple (NASDAQ:AAPL) shares sank another 2.5% in pre-market trading on Thursday, continuing Wednesday’s decline on worries that the Chinese government has told its agencies to stop using iPhones. However, investment firm Wedbush Securities said the issue is “way overblown.”
“On the recent China news over the last few days we believe in a worst case scenario any China government agency iPhone ban is way overblown as to quantify its less than ~500k iPhones of roughly 45 million we expect to be sold in China over the next 12 months,” analyst Dan Ives wrote in an recent note.
Ives, who has an outperform rating and $230 price target on Apple, added that the tech giant has seen “massive” share gains in the Chinese smartphone market, to the tune of roughly 300 basis points over the past 18 months. And with the iPhone 15 right around the corner, the tech giant has “incremental momentum” to gain more share, Ives added.
Regarding the next version of the iPhone, which is slated to be unveiled on September 12, Ives said he is expecting some “noteworthy technology enhancements” related to design, as well as a $100 price increase on the iPhone 15 Pro and Pro Max.
“We believe now is the time to increase iPhone prices modestly as while Apple will keep the base model prices unchanged the enhanced technology, chips, and battery technology in iPhone 15 Pro/Max warrants this strategic pricing move from Apple,” Ives explained.
Ives also pointed out that China is “key” to the success of the iPhone 15, given that the Pro and Pro Max models have become more popular than the baseline models. He is expecting a roughly 75% to 25% split, up from historical splits of 60% to 40%.
