Apple shares rose 1.69% on Monday, as investors reacted to strong signals across its product ecosystem—from resilient iPhone demand to robust early traction for its latest MacBook product—despite ongoing regulatory pressure in China.
The gains come as fresh data and commentary point to improving consumer demand trends, particularly in key markets, alongside continued expansion of Apple’s ecosystem.
iPhone demand remains strong across key markets
Apple was in focus after a Morgan Stanley survey highlighted sustained strength in iPhone demand, supported by rising upgrade cycles and improving consumer interest globally.
The study showed that global iPhone upgrade rates reached 37%, up 2 percentage points from the prior year and the highest on record.
In China, upgrade rates rose 9%, indicating recovery in one of Apple’s most important markets.
The report also noted a five-year high in users switching to Apple devices, alongside an 18% increase in demand for models with larger storage capacity, reflecting continued premiumisation.
Morgan Stanley analyst Erik Woodring expects Apple to be the only major smartphone manufacturer to gain market share this year.
He maintained his Overweight rating and set a $315 price target, citing stronger-than-expected demand.
The firm forecasts iPhone sales to grow 6% in fiscal 2026, compared with 3% for the broader market, and said a potential foldable iPhone could further support pricing and revenue in fiscal 2027.
However, the survey flagged mixed sentiment around Apple’s artificial intelligence push, noting that customers are less willing to pay for AI-driven features.
MacBook demand surprises as low-cost model sells out
Adding to positive sentiment, Apple’s latest MacBook lineup has seen strong early demand, particularly for the newly launched MacBook Neo.
Apple CEO Tim Cook said in a post on X, “Mac just had its best launch week ever for first-time Mac customers.”
The Neo model, priced at $599, appears to be driving the surge in demand, with units sold out and unavailable for in-store pickup until mid-April, while higher-end MacBook Air and Pro models remain readily available.
Despite its lower price point, analysts have downplayed concerns about margin pressure.
“I view the recent launches of Mac products as a major success for Apple near-term and medium-term,” Oppenheimer analyst Martin Yang said in a Barron’s report. “Neo may have slightly lower-than-average margin comparing to other Mac products, but I don’t think margin headwind is large enough to be notable on Apple’s consolidated income statement.”
Ryan Reith, group vice president for IDC’s Worldwide Device Tracker suite, highlighted the strategic benefit of attracting new users into Apple’s ecosystem, particularly as competitors raise prices due to higher memory costs.
“Everyone for how many years now was talking about Apple services growth, Apple services growth. And I know there’s been some bumps in the road, but everybody that they bring in or maintain in their ecosystem, that’s what’s behind their services growth,” Reith said.
China strategy and regulatory risks remain in focus
At the same time, Apple continues to navigate regulatory challenges in China while deepening its engagement in the region.
Speaking at the China Development Forum in Beijing, Tim Cook emphasized the importance of Chinese developers and the country’s manufacturing ecosystem.
The company recently reduced App Store fees for developers in China, a move seen as a response to rising antitrust scrutiny.
State media commentary has suggested further easing may be required, pointing to ongoing pressure around what it described as monopolistic practices.
Apple has also been diversifying its supply chain, expanding production into Vietnam and India while maintaining China as its primary manufacturing hub.
The backdrop is a recovery in Apple’s China business, with revenue from the region rising 38% to $25.5 billion in the December quarter, supported by strong iPhone demand and user switching trends.
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