Source: Snow Leopard Finance
Author: Han Xing

The price of the new iPhone has not increased, one more thing has not appeared, and there is still only a little bit of toothpaste-like innovation - 2023 with the theme “Curiosity Rises”$Apple (AAPL.US)$At the fall press conference, as always, Cook didn't give any surprises.

That seems to confirm$Tesla (TSLA.US)$CEO Musk's sarcasm on social networking platform X (formerly Twitter) a week ago: “I don't know how my current iPhone is different from the previous version. The camera is 10% better?”

At this press conference, which was surrounded by controversy before it was held, Apple unveiled a total of two new product lines:

iPhone 15, iPhone 15 Plus, iPhone 15 Pro, iPhone 15 Pro Max

Apple Watch Series 9, Apple Watch Ultra 2

The logo, which consists of gray and blue quicksand, conceals the new iPhone 15 body design egg. Pre-orders for iPhone 15 series products will begin on September 15, and will officially go on sale on September 22.

Since the release of the iPhone in early 2007, Apple has always been known as a trendsetter in the smartphone industry. However, as there were more and more compromises in the new generation of iPhones, this weather vane began to sway left and right by strong winds from the outside world.

Something a bit new, but not much

“People have very strong positive or negative feelings about Jobs, and the Rashemon effect is very obvious.” Walter Isaacson (Walter Isaacson) wrote this in his “The Biography of Jobs.”

The Rashomon effect comes from the movie “Rashomon,” by Japanese director Kurosawa Akira. It refers to a situation where people involved in an event have their own opinions and it is difficult to discern the truth. This phenomenon also unravels as scheduled before and after Apple's fall press conference every year. Some people affirm Apple's innovation and product power, while others think it is moving forward year after year.

There has been almost no change in the price of this year's new iPhone.

The starting prices of the basic iPhone 15 and iPhone 15 Plus were $799 (RMB 5,999) and $899 (RMB 6,999), respectively, the same as the previous generation.

The two Pro models continue to use the previous pricing model, but are slightly different. The starting price of the iPhone 15 Pro is still 999 US dollars (7,999 yuan), while the iPhone 15 Pro Max has removed the 128G capacity version, raised the minimum capacity option to 256G, and the starting price is 1199 US dollars (9999 yuan).

Since the iPhone XS in 2018, the starting prices of $999 and $1,099 that Apple's two high-end models have always used have gone from $999 to $999 and $1199. However, with the same capacity, there was no substantial price increase for the iPhone 15 Pro Max.

The toothpaste-style innovation at this press conference was mainly reflected in the two iPhone 15 Pro models and the Apple Watch.

During the press conference, Cook and Apple executives mentioned “I can't help but love it” many times. This term is specifically used to describe the new titanium material used in the iPhone 15 Pro version. This alloy is used in spacecraft carrying out exploration missions to Mars. Titanium has a higher strength-to-weight ratio than most metals, making the iPhone 15 Pro the lightest Pro model to date.

At the same time, the iPhone 15 Pro changed the right-angled edge design back to a curved shape, and made the bezel the thinnest in iPhone history.

In addition to cosmetic updates, the iPhone 15 Pro is equipped with the world's first 3nm chip, A17 Pro, which has 19 billion transistors and is equipped with a six-core CPU. Apple has also redesigned the GPU, added 6 cores, and increased the graphics processor speed by 20%.

All of the series that were previously revealed were equipped with a smart island, a periscope telephoto lens, an unmuted paddle, an Action button, and a Type C interface. They also showed up unsuccessfully at the press conference, leaving the whole press conference unsurprising.

The only surprising thing is that no new AirPods were released at this press conference. In addition to the phone, only two Apple Watch models were released — the Apple Watch Series 9 and the Apple Watch Ultra 2.

The new highlights of these two products mainly include the new S9 SiP chip, new gesture interaction, and environmental protection. The maximum screen brightness has been greatly increased. Among them, the maximum screen brightness of the Apple Watch S9 can reach 2000 nits, which is double that of the previous generation. The new interactive gesture operation allows users wearing Apple Watch to perform various actions by tapping each other with two fingers, similar to the Vision Pro gesture interaction function shown by Apple at WWDC in June of this year.

In addition, Apple also spent a lot of time at the press conference to talk about the company's efforts in the field of environmental protection. Through a series of initiatives in materials, clean energy, and low-carbon logistics, the Apple Watch became Apple's first carbon-neutral product.

Judging from technological innovation alone, Apple's fall press conference this time was lackluster. The design changes that have occurred in the new iPhone 15 reflect Apple's compromise on external sound.

Jobs won't compromise, but Cook will

Isaacson, the author of “The Legend of Jobs,” believes that Jobs cannot tolerate people who make reasonable compromises in order to launch products in a timely manner or reduce costs, and “he will not compromise on products.”

However, in the Cook era, while Apple took the top market capitalization position in the world, its position also began to soften.

The abandonment of the Lightning connector, which had been in use for 11 years, was one result of Cook's compromise with the market.

In October 2022, the European Parliament passed a new regulation by an overwhelming vote of 602 to 13, requiring that from the end of 2024, all new portable smart devices such as mobile phones and tablets must use a USB Type-C charging port.

Prior to that, Apple's Macs, iPads, and other hardware devices had already used Type-C connectors. After this press conference, the iPhone 15 and 15 Plus will support USB 2, and the transmission rate is consistent with Lightning before the replacement; the 15 Pro and 15 Pro Max will support USB 3, and the maximum transmission rate can reach 10Gb/s.

There was no mention at the press conference whether the data cable for the new iPhone requires MFI (Made for iPhone/iPad/iPod) certification like the previous Lighting.

Another example of Cook's compromise is the new generation of iPhones starting to write on camera.

When Android manufacturers joined forces with various video giants to roll up camera and video, Apple did not immediately join the battle. However, the iPhone 15 Pro Max is now equipped with a periscope lens with 5x optical zoom. As the name suggests, a periscope lens uses the refraction principle of a periscope to allow light to be refracted multiple times to increase the focal length without changing space. Since the periscope telephoto lens requires more space, only the iPhone 15 Pro Max is equipped with this lens.

This technology is nothing new. In 2017, OPPO first demonstrated 5x lossless zoom technology with a periscope camera structure at the Mobile World Congress. In 2019, the Huawei P30 Pro was equipped with an 8MP periscope telephoto lens.

According to estimates by Dongwu Securities, global periscope camera shipments are expected to reach 130 million units in 2025, and the market size is expected to increase to 4.4 billion US dollars.

In addition to being on par with Android manufacturers in the matter of rolling lenses, Apple also removed the silent paddles that have been used since the first generation on the iPhone 15 Pro. The mute paddle is one of the major features of the iPhone. Users can turn the paddle on or off the mute mode. This function is also considered to be the last imprint of the Jobs era.

The updated Action button adds 8 functions other than muting. By default, the function of the operation button is set to switch between ringing and silent modes.

Just two days before the press conference was held, Apple and$Qualcomm (QCOM.US)$A new agreement was reached to extend the baseband chip supply agreement for another 3 years to 2026.

Apple has always wanted to be able to independently develop core components for its own products. Prior to the fall press conference, several organizations had predicted that the iPhone 15 might be the last product in the series to be equipped with a Qualcomm baseband chip. Afterwards, it would replace the self-developed baseband chip and improve the signal problems that have long been criticized by consumers.

However, Apple is not going well in developing baseband chips. After this agreement is signed, Apple will continue to compromise with “bad signal” for the next 3 years.

The weather vane is being swayed, but just making money is fine

Compromise may not be a bad thing for Apple at this stage.

On Thursday, Apple's stock price fell 2.92% to close at $177.56. At one point, the intraday decline reached 5.1%. Within two trading days, Apple's total market value evaporated by about 191 billion US dollars.

BofA Securities (BofA Securities) analysts believe that if competition from rivals causes iPhone sales to drop by 10 million units per year in China, Apple's earnings per share will drop by 11 cents in 2024. If the reduction in sales volume were extended to 30 million units, earnings per share would be reduced by about 34 cents, and the corresponding share price would be approximately $165.

In addition to facing an increasingly tough competitive environment, the overall performance of the smartphone market is also lackluster.

According to data from market research agency Counterpoint Research, in Q2 2023, sales volume in the global smartphone market fell 8% year on year and 5% month on month, and has been declining year on year for 8 consecutive quarters.

Counterpoint believes that consumer switching cycles are getting longer, device innovation convergence, and the emergence of a more mature refurbished machine market are important reasons why the global smartphone market is leaving behind rapid growth. The mobile phone switching cycle in 2022 was 43 months, reaching an all-time high.

In such a market environment, it is difficult for Apple, whose main revenue is smartphone sales, to buck the trend.

According to the Q3 financial report, Apple's revenue for the quarter was 81,797 billion US dollars, down 1.4% year on year, and there has been a year-on-year decline for 3 consecutive quarters. Among them, iPhone sales revenue was 39.67 billion US dollars, down 2.4% year on year, below market expectations.

The two standard models, the iPhone 14 and iPhone 14 Plus, which were released last year, did not sell well after launch, and the price was reduced less than a month after launch. This puts more pressure on the iPhone 15.

However, there are also some organizations that are optimistic about Apple's future expectations.

Investment bank Wade Bush analyst Dan Ives believes that 250 million iPhones around the world have been in use for more than 4 years, and these users may switch to new devices this year. The upcoming iPhone 15 is likely to benefit from a “mini supercycle,” as around 25% of Apple's loyal users haven't changed their iPhones in 4 years.

Therefore, by fiscal year 2025, he expects Apple's market capitalization to reach 3.5 trillion US dollars, and under a bull market, it may reach 4 trillion US dollars.

According to the 13F document submitted by BlackRock, the world's largest asset management company, it increased its Apple holdings by 4.63 million shares in Q2, the biggest increase in individual shares in the quarter, with a total market value of 2016 billion US dollars.

In the “Fortune” list of the world's top 500 in 2023, Apple ranked second in the world with a profit of 99.8 billion US dollars, after Saudi Aramco, with a net interest rate of 25.3%.

Also, according to Counterpoint Research, in 2023 Q2, Apple accounted for 17% of global mobile phone shipments, but it received 85% of the operating profit of the entire mobile phone market, setting a record for the highest quarterly in history.

Apple remains one of the most profitable companies in the world. However, the iPhone, which accounts for nearly half of the company's revenue, and the Apple Family Bucket Ecosystem, which is closely related to it, means that any small innovation will affect the whole body.

For Cook, a former purchasing and supply chain manager, small iterations with greater certainty may be the better choice.

editor/tolk