Source: Barron's

$Apple (AAPL.US)$Apple Watches Series 9 and iPhone 15 series phones were unveiled at the annual fall press conference held on Tuesday (9/12) local time. Most of the news was in line with analysts' expectations, but one detail came as a surprise to investors: pricing.

Some analysts had previously predicted that the price of the iPhone 15 Pro series products would increase across the board, but Apple would start the price of the new iPhone Pro phone at 999 US dollars, the same as last year. Apple raised the starting price of the iPhone 15 Pro Max by $100, but the phone also has more storage space.

Apple CEO Cook said at the beginning of the press conference that the upcoming Vision Pro headphones “will be shipped early next year.”

Since the focus of this press conference was mainly on the new iPhone and Apple Watch, which did not bring much surprise to Wall Street, Apple's stock price closed down 1.7% on Tuesday to $176.30. After the price of the iPhone 15 series products was announced, the stock price fell 2.5% for a while.

iPhone business revenue accounts for more than half of Apple's total revenue

Komo: Huawei's 5G phones will steal iPhone 15 sales

Recently, Huawei's mobile phone using a 7-nanometer process chip has caused a stir. J.P. Morgan (J.P. Morgan) believes that the Mate 60 Pro smartphone recently released by Huawei may put pressure on Apple's business in China.

Huawei's new product marks a new milestone in China's chip manufacturing industry for mass-market consumer device semiconductors. The Mate 60 Pro also supports 5G networks for faster connections.

J.P. Morgan analyst Gokul Hariharan (Gokul Hariharan) wrote in a research report on Tuesday: “We believe Huawei has made a comeback in the smartphone market in China. New products may help Huawei gain more market share in the domestic market. It may adversely affect the growth of the iPhone's market share in China, and at the same time put some downward pressure on the iPhone 15.”

Hariharan also pointed out that although sales of Huawei's 4G phones are growing slowly, in the second quarter of 2023, Huawei's share of the Chinese mobile phone market has risen from 7% in the second quarter of 2022 to 13%, which is a good sign for the sales prospects of the new 5G phones.

“The iPhone's market share growth in China has begun to level off, and the market share is likely to decline in the next two quarters,” Hariharan wrote.

Apple Pay may become iPhone's “secret weapon” 

Although the iPhone 15 has been accused of being uninnovative, raising concerns about the future of the mobile phone business, what was not mentioned at this press conference is that Apple is quietly growing into a fintech giant with its digital wallet Apple Pay, which not only brings more competition to competitors in the payment field, but also allows iPhone users to remain in the Apple ecosystem and provide more reasons to continue to buy new models.

Apple Pay was introduced in 2014, but it wasn't until the last few years that it began to spread. MoffettNathanson analyst Lisa Ellis (Lisa Ellis) estimates that Apple Pay processed 600 billion to 700 billion US dollars in payments in 2022. Ellis wrote in a research report on Tuesday that Apple Pay's share of “branded” (branded) checkout services is also increasing.

Ellis pointed out that Apple's P2P platform and cashback service Apple Cash have never been very successful. Furthermore, the number of Apple Card users is only 7.5 million.

However, Apple continues to expand into payments and other fintech fields. Apple said in August that the high-yield savings account launched in cooperation with Goldman Sachs (Goldman Sachs) in April currently has a deposit amount of more than 10 billion US dollars, with a yield of 4.2%.

Currently, these services will not have a substantial impact on Apple's revenue base. The market generally estimates that Apple's revenue base will be about 389 billion US dollars this year, but it has given users another reason to stick with the iPhone and upgrade to a new model for ease of use.

Other companies in the payments sector are also facing increasingly fierce competition. Apple's mobile operating system is the most popular system in the US. Although iPhone users can download apps such as PayPal and Venmo from PYPL (PYPL) and Block (SQ) Cash App, the convenience of using Apple apps on Apple hardware may make users feel that Apple's financial products such as Apple Pay Later and Apple Cash are more attractive compared to competitors.

Ellis wrote in the research paper: “Given Apple's size, investment, resources, and user base, the company has become the most powerful technology giant in the payments field.”

So far in September, Apple has fallen by around 6.5%. There is still a cumulative increase of about 35% so far this year.

Editor/jayden