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What's Next for Apple Stock After Wednesday's Big Event?
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The expectations from Apple Inc.’s (AAPL - Free Report) keynote event have always been high (with the company unveiling its latest iPhones here) and this year was no different. Now that the initial excitement surrounding the iPhone 7 and iPhone 7 Plus is settling down, we are compelled to delve deeper to determine what’s next.
To start with, let’s have a look at the changes/additions that the iPhone maker has done to its most important device.
What Does iPhone 7 Bring to the Table?
Since the launch of iPhone 6S last year, the company has been criticized for a lack of innovation, so much so that it has been seeing a decline in demand for its devices over the past few quarters (a part of it was due to macroeconomic turmoil in China and some other regions).
Apple’s latest smartphone marks a significant improvement from its predecessors. The company has overhauled almost everything. The phone features a bigger and a sharper screen (Retina HD Display), water-resistant design, a better camera (the Plus version comes with an advanced dual camera), a faster processor (with A10 Fusion Chip that is claimed to be twice speedier than that in iPhone 6), a much advanced audio system (stereo speakers, AirPods) and promises improved connectivity, battery life and storage.
What to Expect from the Upgrade Cycle this Time?
Undoubtedly, a number of Apple users have been waiting for this launch in order to upgrade their devices.
Apple has mastered the game of strategic cycle upgrades it seems and placed itself quite well even in difficult demand situations (or as it appears to us).
Research reports indicate that people generally upgrade to a new mobile device once every two years. The company banks on this trend and rolls out its biggest updates every two years. Therefore, now is a good time for iPhone 6 users to get an upgraded device. However, Apple made a smart move last year, when, along with the launch of iPhone 6s, it initiated an upgrade plan (allowing users the ease to upgrade their existing iPhone every year). This implies that a significant number of iPhone 6s users will also be upgrading their existing handsets. Moreover, the company also provides scope for an early upgrade to those who have been using their existing devices for 6 months but haven’t completed a year yet.
So, all in all, Apple has indeed created a ‘robust upgrade cycle’ for itself.
Also, the company continues to solidify its ecosystem as evident from the event.
The Apple Ecosystem
We all know Apple has created an auxiliary system of hardware and services aka Apple ecosystem with iPhone at its core to offer an unmatched user experience.
Investors saw some significant updates to the ecosystem yesterday, especially with regard to Apple Music, App Store and Apple Watch.
The company declared that despite raging competition, the performance of Apple Music has remained strong with over 17 million subscribers. At the same time, its App Store sales surged 106% year over year in the last two months. In fact, CEO Tim Cook went ahead to say that App Store already brings in twice as much revenues as its prime competitor, Alphabet Inc.’s (GOOGL - Free Report) Google Play Store.
At the event, Apple unveiled a slew of interesting updates for the App Store. It partnered with Nintendo (NTDOY - Free Report) to roll out Super Mario Run for this holiday season. It also announced that a Pokemon GO app for Apple Watch is in the pipeline and revealed that each of its iWork apps now feature real-time collaboration.
The most important developments were reserved for Apple Watch. The company not only launched Apple Watch Series 2 but also unveiled its latest operating system, Watch OS 3, which appears to be a remarkable improvement over its predecessor. The company has also partnered with Nike (NKE - Free Report) for a special Apple Watch designed for athletes and fitness enthusiasts.
Wrapping Up
Though the company’s shares did not see much movement yesterday, it appears that Apple is going full throttle to reclaim its earlier glory. We expect iPhone 7 to repeat the success of iPhone 6.
We will get a better picture once the first weekend sales figures come out. However, we expect shares to remain range bound till the company releases its quarterly results next month.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
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What's Next for Apple Stock After Wednesday's Big Event?
The expectations from Apple Inc.’s (AAPL - Free Report) keynote event have always been high (with the company unveiling its latest iPhones here) and this year was no different. Now that the initial excitement surrounding the iPhone 7 and iPhone 7 Plus is settling down, we are compelled to delve deeper to determine what’s next.
To start with, let’s have a look at the changes/additions that the iPhone maker has done to its most important device.
What Does iPhone 7 Bring to the Table?
Since the launch of iPhone 6S last year, the company has been criticized for a lack of innovation, so much so that it has been seeing a decline in demand for its devices over the past few quarters (a part of it was due to macroeconomic turmoil in China and some other regions).
Apple’s latest smartphone marks a significant improvement from its predecessors. The company has overhauled almost everything. The phone features a bigger and a sharper screen (Retina HD Display), water-resistant design, a better camera (the Plus version comes with an advanced dual camera), a faster processor (with A10 Fusion Chip that is claimed to be twice speedier than that in iPhone 6), a much advanced audio system (stereo speakers, AirPods) and promises improved connectivity, battery life and storage.
What to Expect from the Upgrade Cycle this Time?
Undoubtedly, a number of Apple users have been waiting for this launch in order to upgrade their devices.
Apple has mastered the game of strategic cycle upgrades it seems and placed itself quite well even in difficult demand situations (or as it appears to us).
Research reports indicate that people generally upgrade to a new mobile device once every two years. The company banks on this trend and rolls out its biggest updates every two years. Therefore, now is a good time for iPhone 6 users to get an upgraded device. However, Apple made a smart move last year, when, along with the launch of iPhone 6s, it initiated an upgrade plan (allowing users the ease to upgrade their existing iPhone every year). This implies that a significant number of iPhone 6s users will also be upgrading their existing handsets. Moreover, the company also provides scope for an early upgrade to those who have been using their existing devices for 6 months but haven’t completed a year yet.
So, all in all, Apple has indeed created a ‘robust upgrade cycle’ for itself.
Also, the company continues to solidify its ecosystem as evident from the event.
The Apple Ecosystem
We all know Apple has created an auxiliary system of hardware and services aka Apple ecosystem with iPhone at its core to offer an unmatched user experience.
Investors saw some significant updates to the ecosystem yesterday, especially with regard to Apple Music, App Store and Apple Watch.
The company declared that despite raging competition, the performance of Apple Music has remained strong with over 17 million subscribers. At the same time, its App Store sales surged 106% year over year in the last two months. In fact, CEO Tim Cook went ahead to say that App Store already brings in twice as much revenues as its prime competitor, Alphabet Inc.’s (GOOGL - Free Report) Google Play Store.
At the event, Apple unveiled a slew of interesting updates for the App Store. It partnered with Nintendo (NTDOY - Free Report) to roll out Super Mario Run for this holiday season. It also announced that a Pokemon GO app for Apple Watch is in the pipeline and revealed that each of its iWork apps now feature real-time collaboration.
The most important developments were reserved for Apple Watch. The company not only launched Apple Watch Series 2 but also unveiled its latest operating system, Watch OS 3, which appears to be a remarkable improvement over its predecessor. The company has also partnered with Nike (NKE - Free Report) for a special Apple Watch designed for athletes and fitness enthusiasts.
Wrapping Up
Though the company’s shares did not see much movement yesterday, it appears that Apple is going full throttle to reclaim its earlier glory. We expect iPhone 7 to repeat the success of iPhone 6.
We will get a better picture once the first weekend sales figures come out. However, we expect shares to remain range bound till the company releases its quarterly results next month.
As of now, Apple carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
APPLE INC Price and Consensus
APPLE INC Price and Consensus | APPLE INC Quote
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>