In a note Monday, analysts at UBS maintained a Neutral rating and $190 per share price target on Apple (NASDAQ:AAPL), stating that innovation drives sticky services.
However, the investment bank noted that there are some signs of stress.
UBS explained that its Evidence Lab surveyed ~4,000 iPhone users to better understand the installed base and traction of different Apple services.
One key takeaway was that the iPhone retention rate in the US is 79%, down 400 bps from last year. The iPhone retention rate in China is 49%, up from 44% last year.
The average age of the iPhone installed base, excluding China, is over 34 months, compared to 31 months in the prior survey. This is likely driven by soft global sell-through over the past 12 months.
UBS added that service attach rates are showing signs of slowing across most offerings and regions.
The investment bank also revealed that Google remains the primary browser, excluding China, but "metrics on the margin soften."
"In the most recent survey, just 68% of global respondents cited the Google search engine was better than the competition, down 300 bps YoY and down 600 bps from the 2020 survey," said the bank.
Furthermore, "interest in Apple Pay has materially increased over the past several surveys driven by the rise of contactless payments and [the] increasing number of vendors accepting the technology."