Apple (AAPL - Free Report) is now rumored to launch three new iPhones in September. Per TechCrunch, which quoted a Bloomberg report, the company is anticipated to launch an updated iPhone X, a bigger iPhone and an iPhone 8 that will feature iPhone X design.
It is highly anticipated that the updated iPhone X will be powered by Apple’s latest A12 chip with a 5.8-inch OLED screen. The latest chip will ensure faster processing speed and better camera performance.
The bigger phone is expected to have a 6.5-inch display along with stainless steel edges, two cameras on the back and an OLED display.
The iPhone X inspired iPhone 8 is expected to be the cheaper version this season. The device is likely to have aluminium edges instead of stainless steel edges as found in iPhone X. Moreover, it is anticipated to have a single camera on the back and a 6.1-inch LCD display.
Expanding iPhone Portfolio to Drive Growth
Apple’s fortunes are tied to iPhone, which is by far its biggest revenue contributor. The device accounted for 56.1% of net sales in third-quarter fiscal 2018 that benefited from higher average selling price (ASP) and customer loyalty.
The company sold 41.3 million units of iPhones. Although the company sold only a few hundred more iPhones than it did a year ago, segment revenues were 20% higher. This was primarily due to 19.5% boost in iPhone ASP, which was $724 in the quarter.
The three new devices promise strong growth prospect for Apple, prior to the upcoming holiday season. Although none of the devices will be completely new like iPhone 6 or iPhone X, the upgraded internal features are expected to attract new customers. Further, unflinching loyalty for iPhone is a key catalyst.
Moreover, the company’s focus on selling more iPhones at a higher ASP is expected to drive the top line, going forward.
Services to Boost from Steady iPhone Sales
Further, steady volume of iPhone sales ensures continuing demand for Services, which has emerged as the new cash cow for the company.
Services — including revenues from Internet Services, App store, Apple Music, AppleCare, Apple Pay, and licensing and other services — surged 31% year over year in third-quarter fiscal 2018.
Apple Music is one of the biggest new growth areas in Services. The company is gaining market share against Spotify (SPOT - Free Report) in the U.S. market. Moreover, increasing adoption of Apple Pay is strengthening competitive position of the company against the likes of Square (SQ - Free Report) and PayPal (PYPL - Free Report) .
Notably, Apple is on track to double Services revenues of $24 billion in fiscal 2016 by 2020.
Currently, Apple has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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