Source: Zhitong Finance Author: Zhuang Lijia
$Apple (AAPL.US)$The fall press conference will be held at 01:00 a.m. on September 13 (Wednesday), Beijing time. At that time, the iPhone 15 series phones, as well as the latest Apple Watch and AirPods, will be launched. Apple may also discuss software updates for the iPhone, iPad, and Apple Watch, such as iOS 17, iPadOS 17, and watchOS 10.
Apple continues to implement a high-end strategy
Apple is counting on major changes to its high-end iPhones to entice people to update their phones to boost the company's revenue. In 2016, when iPhone sales began to stabilize (around 200 million to 220 million units per year), Apple had a bold idea — to increase revenue through high-end. A year later, Apple put the idea into action, and it launched the iPhone X for $999. Meanwhile, in 2018, it launched the iPhone XS Max, and this smartphone with 512 GB of storage reached 1,449 US dollars. Last year, it also launched the iPhone 14 Pro Max, which costs 1,599 US dollars and has a storage capacity of 1 TB.
Apple's strategy has worked. Over the past seven years or so, the annual sales volume of iPhones has remained stable, yet revenue has increased by about 70 billion US dollars. This shift also caused Apple to stop announcing the sales volume of various products in FY2019 and instead focus on the revenue brought by each product.
Apple is expected to launch four models this year, including the basic iPhone 15 and iPhone 15 Plus, as well as the high-end iPhone 15 Pro and iPhone 15 Pro Max. It is reported that the entire iPhone 15 series will be upgraded to a “smart island” design, and for the first time, a USB-C interface will replace the previous Lightning connector. Apple will also offer longer battery life, faster USB-C data transfers, thinner bezels, and better screens to entice users to buy the two more expensive high-end models.
It is reported that the iPhone 15 Pro Max will be equipped with a new periscope lens, and its zoom function will be significantly improved. The iPhone 14 Pro Max can only support 3x zoom, while the iPhone 15 Pro Max is expected to support 5x to 10x zoom. This shows that Apple's high-end strategy is becoming more aggressive.
Apple will also push users to buy other, more expensive products. It plans to update two product lines: Apple Watch Series 9 (currently available in 41 mm and 45 mm sizes) and the second-generation Ultra (49 mm size). Among them, the more expensive Ultra will have a titanium case, a larger screen, and longer battery life.
Additionally, as part of the iPhone's shift to USB-C charging, Apple is working to move all of its Lightning-connector-based accessories to the new standard. One of the first products on this list is the AirPods Pro, which is one of Apple's best-selling products. The company also plans to introduce USB-C charging on its low-end AirPods and AirPods Max as early as next year.
Will the new products help Apple overcome challenges?
Apple's stock price fell by a total of nearly 6% last week, and its market value evaporated by 176.4 billion US dollars. For its part, Apple hopes the upcoming iPhone 15 series phones will help the company withstand any challenges at a time when global smartphone demand is slowing.
Some analysts pointed out that the sales volume of the iPhone 15 series phones is likely to be good because they have a very large potential switching market. According to analysts, out of the 1.2 billion iPhone users in the world, about 300 million have not upgraded to a new iPhone in the past 4 years. Considering that Apple users generally have strong product stickiness, this means that quite a few will continue to buy updated iPhones in the future, and the iPhone 15 may be their first choice, but whether to switch will depend on whether the price and performance of the new iPhone 15 series phones meet expectations.
However, according to J.P. Morgan, the upcoming Apple iPhone 15 series phones have not been substantially upgraded, so they will not attract a large number of users to update. The bank also lowered Apple's target share price from $235 to $230. J.P. Morgan said, “Will the price of the iPhone increase? We think it's likely that Apple will increase the price of all iPhone models, not just the Pro models. If the price gap between the basic model and the Pro model is too big, then consumers don't have much incentive to buy the high-end model.”
Additionally, Dan Niles, founder and portfolio manager of the hedge fund Satori Fund, stated in a social media post that he plans to short Apple before and after the launch of the new iPhone 15, and that Apple is now their biggest single stock short position. The reason given by Dan Niles is that the rise of the Huawei Mate60 Pro has intensified the competition faced by Apple.
Martin Yang, an analyst at investment bank Oppenheimer, said that due to the launch of the new Huawei phone, Apple's iPhone shipments in 2024 may drop by 10 million units. Earlier, Tianfeng International analyst Guo Mingyi determined that the sales volume of the Huawei Mate60 Pro could reach 5.5 million to 6 million units in 4 months after launch, and the cumulative shipment volume 12 months after sale would reach at least 12 million units.
edit/lambor