Apple Inc’s (AAPL - Free Report) eagerly awaited event went ahead as expected with the launch of Apple Watch Series 3, a new Apple 4 K TV and three new iPhone editions namely iPhone 8, iPhone 8 Plus and the mega edition, iPhone X (called iPhone “ten”).
The event was held at Steve Jobs Theater at Apple’s new spaceship campus in Cupertino. The event began with a Steve Jobs voice over followed by CEO Tim Cook’s homage to the legend. Cook said it was only fitting that “Steve should open his theater.”
iPhone X Unveiled
The mega edition was biggest highlight of the event and was unveiled towards the end of the event. Just like the rumors, the phone has end-to-end curved OLED display with a facial recognition technology that unlocks the phone as well as helps to make secure payments via Apple Pay.
It supports wireless charging and is resistant to microscopic dust and water. It also has the A11 bionic chip. Apple added that with the new A11 bionic chip, augmented reality games and apps “reach a new level of fluidity and realism.”
Apple claims that it will not be easy to fool the Face ID technology though an “evil twin” could compromise the ID. The technology is powered by the TrueDepth camera that boasts a flood illuminator, infrared camera, dot projector, front camera and ambient light sensors. Machine learning enables Face ID to adjust with physical changes in facial appearance over time.
The Home button has been done away with. Users will just have to swipe up to access the home screen.
The iPhone X has 5.8” Super Retina Display with 2046×1125 resolution and 458 PPI. The camera is way better than the earlier iPhones. The iPhone X has 12 MP dual cameras with faster sensors and f/1.8 and f/2.4 apertures.
The starting price of the phone is at $999. Preorders begin Oct 27 and phones will be available from Nov 3.
Launch Delay A Concern?
Here is our concern. The delay in launch of iPhone X somewhat confirms supply chain issues as has been widely reported. With the November launch, the sales won’t be included in this fiscal.
Also, we believe the new iPhone is definitely an upgrade over its predecessors but doesn’t have exclusive features. Samsung phones already have this. Its price point is also a cause of concern for masses but won’t deter buyers who are looking to get their hands on the new phone to boost their status symbol. Also, support for AR apps is expected to prove a major draw.
Per reports, sales in America are unlikely to be impacted but China sales could be affected as the $1000 price tag is double the average Chinese monthly salary.
Moreover, the other two models release just a month and a half prior to iPhone X. Consumers can definitely hold their purchases for some more time and this could cannibalize iPhone 8 and 8 Plus sales, thereby impacting the current quarter’s sales.
Let’s Have a Look at Other Announcements
iPhone 8 and iPhone 8 Plus: Apple’s iPhone 8 and iPhone 8 Plus are the new generation of iPhones with an all new glass design. The glass design is further reinforced by internal laser welded steel. Apple has called it “the most durable glass ever in a smartphone”. It also supports wireless charging and is resistant to microscopic dust and water. The stereo speakers are 25% louder then iPhone 7.
It comes with retina HD display (4.7” for 8 and 5.5” for 8 Plus) with iPad’s True Tone color display and 3D touch. The True Tone technology helps to adjust white balance to match the light in the surrounding environment.
The new editions phones also carry A11 Bionic chips that have four efficiency cores that are 70% faster than A10 Fusion chips. It has two performance cores whose capacity has now enhanced 25%. It also carries Apple’s own designed three core GPU, which is up to 30% faster than A10 Fusion.
Coming to the camera, as widely expected, there have been a number of developments. The new phones feature a 12 MP camera that has upgraded color filter and deeper pixels. The portrait mode is better with “dual cameras and new facial land marking” helping to create studio like dramatic lighting effect.
The starting price of these phones is $699 and $799, respectively, for 64 GB version and they come in three different colors including a new gold finish. Preorders begin Sep 15 and the phones will be available from Sep 22.
Apple Watch Series 3: Apple has taken a major leap forward with the new Watch series by integrating cellular connectivity. The new Watch (with watch OS4 operating system) will have a built-in LTE cellular connection, thereby eliminating the need to be connected to an iPhone. Users do not need a new number for getting cellular connection on their watches.
Chief financial officer, Jeff Williams called it the “ultimate expression of Apple Watch.” Users can call, text as well as access GPS and third party applications like WeChat. Also, with integrated cellular and Apple Music, 40 million songs are available for streaming on your wrist, added Williams. And, yes, for the first time Siri can talk to Watch users now.
All this has been made possible by the new dual core processor, which is 70% faster than its predecessor. To work around the problem of an antenna for the cellular, Apple has turned the display into a cellular antenna. It also has an electronic SIM and a barometric altimeter. Its battery life is over 18 hours.
Apple will take orders (watch with cellular) from Sep 15 and the device will be available from Sep 22 in nine countries including the United States, United Kingdom, Japan, and Switzerland in partnership with 14 carriers initially.
The non-cellular version will be available in 26 countries (China, Canada and Australia among others) post launch.
The watch (with cellular connection), which costs $399 will be available in a variety of colors namely gold, aluminum, silver and space grey. Users will have a range of bands to choose from including the sport loop. Watch Series 3 without cellular is priced at $329. Series 1 price has been slashed to $249.
As far as OS4 is concerned, it has a plethora of health benefit features including GymKit, smart activity coaching and new features for swimmers like auto set as well as a workout feature for high intensity interval training. Williams added that Apple’s heart rate monitor will now be on Watch face and there is a feature that will alert the user about an increase in heart rate when the person is in a state of rest. Apple wants its users to be aware of cardiac arrhythmia, a major cause of a stroke.
Apple 4K TV: The new Apple TV has two new features called 4K resolution and High Dynamic Range (HDR) streaming capacity. User Interface has been revamped in the 4K TV. Users can now see all 4K content across leading studios on iTunes at the price of HD. 4K content from Netflix and Amazon will also be available on 4KTV. Live sports will be available on 4K TV.
The new 4K TV boasts a new tvOS and has an A10x processor with CPU performance twice as faster and graphics performance four times faster than the current Apple TV.
Apple TV App will be made available in seven more countries by this year, starting with Canada and Australia.
Zacks Rank and Share Price Movement
At present, Apple carries a Zacks Rank #3 (Hold).
Notably, the company has outperformed the industry in the past year. Shares of Apple have surged 44% compared with the industry’s 42.9% increase.
Stocks to Consider
Better-ranked stocks in the broader technology sector include Applied Materials (AMAT - Free Report) , Activision Blizzard (ATVI - Free Report) and FormFactor Inc (FORM - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Applied Materials, Activision and Applied Optoelectronics is currently projected to be 17.1%, 13.6% and 16%, respectively.
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