iPhone Has Never Been More Popular With Teens

The popularity of Apple’s iPhone with teenagers is near record highs, according to research from Piper Sandler. And that’s good for Apple stock.

In its 2022 survey of teens, which covered more than 7,000 respondents, Piper Sandler found that 87% had an iPhone — only slightly below the 88% record set in spring 2021. Analysts at the investment bank said that this number could return to record highs because 87% also intend the iPhone to be their next smartphone purchase.

Apple (ticker: AAPL) shares were down 1.5% in Wednesday’s premarket trading, largely in line with futures tracking the S&P 500 and Nasdaq indexes.

“Overall, we view the survey results as a sign that Apple’s place as the dominant device brand among teens remains well intact,” a team at Piper Sandler led by Harsh V. Kumar said in a report Wednesday.

More than 23% of teens plan to upgrade to an iPhone 13 in the coming months, the data showed.

“The iPhone appears to be set up well, with iPhone 13 ownership off to a strong start,” the Piper Sandler analysts said. “iPhone ownership remains near all-time levels, with continued strong purchase intention moving forward.”

The data is a good sign for Apple stock — especially the sky-high purchase intentions for the iPhone. The company’s flagship product is a key driver of revenue at the tech giant, and, as Barron’s has reported, the company’s stock price practically lives and dies based on yearly iPhone sales.

Apple’s non-handset products are also doing well, according to the research, with more than 30% of teens surveyed owning an Apple Watch and 72% owning AirPods.

The Piper Sandler survey also revealed that TikTok has surpassed Snapchat for the first time as the favourite social media platform among teens, at 33% compared to 31% preference for Snapchat. Shares in parent company Snap (SNAP) were down more than 2% in premarket trading Wednesday.

E-commerce giant Amazon (AMZN) also remained top-of-mind among teens as a preferred website, according to the analysts; shares in Amazon were 1.5% lower.

Alibaba Group co-founder Jack Ma said competition will make the company stronger and the e-commerce giant needs to trust in the power of market forces and innovation, according to an internal memo to commemorate the company’s 25th anniversary.

“Many of Alibaba’s business face challenges and the possibility of being surpassed, but that’s to be expected as no single company can stay at the top forever in any industry,” Ma said in a letter sent to employees late Tuesday, seen by The Wall Street Journal.

Once a darling of Wall Street and the dominant player in China’s e-commerce industry, the tech giant’s growth has slowed amid a weakening Chinese economy and subdued consumer sentiment. Intensifying competition from homegrown upstarts such as PDD Holdings ’ Pinduoduo e-commerce platform and ByteDance’s short-video app Douyin has also pressured Alibaba’s growth momentum.

“Only with competition can we become stronger and allow the industry to remain healthy,” Ma said.

The letter came after Alibaba recently completed a three-year regulatory process in China.

Chinese regulators said in late August that they have completed their monitoring and evaluation of Alibaba after the company was penalized over monopolistic practices in 2021. Over the past three years, the company has been required to submit self-evaluation compliance reports to market regulators.

Ma reiterated Alibaba’s ambition of being a company that can last 102 years. He urged Alibaba’s employees to not flounder in the midst of challenges and competition.

“The reason we’re Alibaba is because we have idealistic beliefs, we trust the future, believe in the market. We believe that only a company that can create real value for society can keep operating for 102 years,” he said.

Ma himself has kept a low profile since late 2020 when financial affiliate Ant Group called off initial public offerings in Hong Kong and Shanghai that had been on track to raise more than $34 billion.

In a separate internal letter in April, he praised Alibaba’s leadership and its restructuring efforts after the company split the group into six independently run companies.

Alibaba recently completed the conversion of its Hong Kong secondary listing into a primary listing, and on Tuesday was added to a scheme allowing investors in mainland China to trade Hong Kong-listed shares.

Alibaba shares fell 1.2% to 80.60 Hong Kong dollars, or equivalent of US$10.34, by midday Wednesday, after rising 4.2% on Tuesday following the Stock Connect inclusion. The company’s shares are up 6.9% so far this year.