Apple cutting trade-in prices may be sign of ongoing 'strong demand'
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Apple (NASDAQ:AAPL) lowered trade-in prices for the iPhone, iPad, Apple Watch, Mac earlier this month in a move that implies "strong demand," according to analyst Wamsi Mohan of Bank of America
Mohan, who has a buy rating and a $200-a-share price target on Apple's (AAPL) stock, noted that this is the second time this year the tech giant has cut the trade-in value of its devices, with different devices seeing different price cuts in different countries. Additionally, there is a discount between Apple's (AAPL) trade-in value and the trade-in value for third parties.
In a research note Tuesday, Mohan said that the successive reduction in Apple's (AAPL) trade-in prices as opposed to those of third parties "indicates that demand for the iPhone remains healthy. Mohan added that Apple (AAPL) is benefiting from "multiple tailwinds" for both its hardware and services. 
Apple (AAPL) shares rose 1.3%, to $146.70 in early trading Tuesday.
In addition, Mohan pointed to a global survey conducted in April by Bank of America that showed more than 24% of respondents still had an iPhone 8 or older, which is seen as an opportunity to drive a replacement cycle. Mohan also noted that iPhone 6 and iPhone 6 Plus ownership in China is "relatively higher" than in the U.S. and U.K., with Apple (AAPL) still accepting those devices for trade-in in that country and not in the U.S. and U.K.
Aside from obviously boosting sales, Mohan said Apple (AAPL) benefits from the trade-in program by allowing customers to buy a new high-priced phone because of the high residual value, as well as offsetting the cost of purchase and driving purchases faster and aiding the company in cross-selling other products.
On Monday, Apple (AAPL) slipped as investment firm Monness, Crespi, Hardt cut estimates on the tech giant, noting the current economic environment is like a "towering inferno."