According to Bank of America, analysts on Wednesday said that iPhone demand remains strong in spite of a report. Apple cut productioniPhone 13 and iPhone SE.

The Bank of America analyst wrote in a note that “These articles may lead investors to believe there’s risk to demand. However, we believe demand remains strong based upon our analysis of iPhone trading-in prices.”

Bank of America AppleSome iPhone models saw lower trade-in value after the launch $429 iPhone SEIt was early March. The note stated that the iPhone 12 Pro Max Max model, which is the most recent available, now has a value of $650, as opposed to $700 prior to its launch. Analysts argue that this indicates strong demand since Apple does not need to charge as much for people to swap in their older iPhones to get newer models.

Apple spokespeople were unavailable to discuss the changes in price for trade-ins.

The analysts stated, “This is in comparison to 2019 when Apple offered high-trade-in prices to 3rd party to drive upgrades.” China has also imposed additional lockdowns in Shanghai. But, the analysts noted that companies are now able to produce through COVID, and Apple/Foxconn can move production to different areas. We don’t expect any material impacts from these shutdowns.

Bank of America analysts also said, in another indication of Apple’s strength with the iPhone SE. global surveyIt was conducted in January and showed that 25% of the respondents owned an iPhone 8 or older. Target audience for iPhone SE are old iPhone users.

Bank of America stated that they see it as an opportunity to drive a replacement cycle. Apple could target to upgrade these users with a newer iPhone. This could explain why Apple accepts iPhone 6 Plus and 6 Plus models to trade in in China, but not the U.S. or UK.

Bank of America believes that Apple would benefit from expanding its iPhone user base. This can be then monetized to increase services revenue. Apple’s services business grew 24% year-over-year to $19.52 billionDuring fiscal Q1.