Apple iPhone 17 demand is 'quite strong,' says BofA's Wamsi Mohan

Core Insights - The demand for the iPhone models, particularly the baseline Pro model, is strong, especially in China, where lead times are extended due to high demand and the unavailability of the iPhone Air [1][2][3] - The current iPhone 17 cycle is performing better than expected, indicating a positive trend in consumer interest and sales [4][5] - Apple's business model has shifted from a hardware-centric approach to a focus on sustained earnings growth, driven by vertical integration and a large install base of over two billion devices [6][7] Financial Performance - Apple's gross margins are expected to improve, potentially exceeding 50%, driven by product mix, vertical integration, and favorable foreign exchange rates [7][8] - Historical gross margins have increased from 35% a decade ago to a projected 50%, showcasing the company's ability to enhance profitability [7][8] Market Potential - The integration of AI technology is anticipated to unlock a trillion-dollar total addressable market (TAM) for Apple, positioning the company as a key player in AI at the edge [9] - Earnings projections suggest a growth from approximately $850 million next year to around $930 million the following year, with potential for significant upside if AI developments are successful [10] Price Target - The current price target for Apple shares is set at $270 over the next 12 months, with potential for exceeding $300 in the long term as AI's impact on the business becomes recognized [10]