According to the news report by Bloomberg, Apple Inc. just completed the biggest day of its year on September 12. This is because it is on this day that the Chief Executive Officer of the trillion dollar company Tim Cook took to the stage to unveil the company’s latest offerings.
Apple Inc. used this opportunity to introduce the world to its latest line up of iPhones and other gadgets. And according to industry experts, there were no surprises. The new products are offering higher average selling prices as well as dual-sim card support, which, analysts feel, may help the company achieve better sales and profitability in the coming year.
Apple’s shares went up by 0.2% during pre-market trading on September 12, thereby regaining some traction in the market after it had dropped by 1.2% after the unveiling. The company’s shares closed the day’s trading at $226.41 per share.
A few of Apple’s suppliers in Asia also saw a drop in their share prices after the September 12 event. Alps Electric Co. from Japan was down 4.8% at the end of the trading day. TDK Corp. fell by 3.9% and Hon Hai Precision Industry Co. saw a drop of 1.3% in its share prices.
According to Katy Huberty of Morgan Stanley, the iPhone’s ASPs, larger storage space across all models was a pleasant surprise. The inclusion of the dual-sim card was also received well by the audience. The date from which the iPhone Xr is going to be available – Oct 26 – was a little later than expected, especially since a lot of the early adopters would veer towards the Xs MAX.
According to Hiroharu Watanabe, the SMBC Nikko analyst, the new range of iPhone wouldn’t really impact the current status of the iPhone market. Watanabe feels that while the more expensive iPhones may not see much movement, the cheaper iPhone Xr may just become a best seller in the market – even with the delayed release date.
Nomura Instinet’s Jeffrey Kvaal stated that Apple was once more reshaping the higher end of the smartphone market with its latest gadgets.
Michael Olson from Piper Jaffray opined that the new lineup of smartphones offer a wider range of choices, and this should push up unit sales as well as ASP. This in turn should result in greater revenues and earnings per share for the company in 2019 and 2020.
RBC’s Amit Daryanani felt that Apple’s focus was moving away from product replacement and towards profitability and services. This, he believes is a positive step, especially in a mature market like the smartphone market. He feels that the tech giant is positioned to keep up average single digit sales and a growth of low to mid-teens in earnings per share. Overall, the growth environment for the iPhones will remain flattish.
According to Gene Munster from Loup Ventures, they too are looking forward to better numbers from Apple in the coming years. Apple has shown its mastery of pricing slabs, thereby looking at extracting more money from their customers.
Rod Hall from Goldman Sachs the new lower prices Apple phones have effectively made the iPhone 8/8+ models obsolete. This according to him will also lead to a reduction in the overall average selling price of iPhones and lowered EPS estimates.
Hall felt that these cuts on estimates would be easily offset by the per-unit cost going up. Additionally, the lower prices of the iPhones is, according to him, Apples strategy to make an aggressive push to attract users to their phones and the new face ID technology that it is using.