Apple Stock News
For the latest Apple Stock News, AAPL closed at $108.36 on Thursday, September 8th, with a gain of 0.61%, or $0.66 from Apple’s previous closing of $107.70.
Latest updates on Apple Inc: Apple Unveils the New iPhone 7 Model
The largest overhaul on the new iphone model is the removal of the standard headphone jack, for the new bluetooth AirPods, costing $159 (bundled free iPhone 7 purchases). The idea behind it is for Apple to reignite is revolutionary identity as they move to remove the traditional headphones, with more advanced bluetooth technology, incorporating Beats technology within as well. The removal of the headphone jack has helped Apple to create a water resistant iPhone, of up to 1 meter in depth for approximately 3o minutes.
https://www.youtube.com/watch?v=Q6dsRpVyyWs
(Source: Apple Inc. YouTube page)
Additional innovative changes for the iPhone 7 model include various significant performance updates. The most significant change to the exterior includes the model being “jet black”, for a mirror-like experience; as well as dust and water resistance. In the interior, the main changes include a new graphics processing chip, called the A10 Fusion; which is said to be the most powerful graphics chip ever put into a smart phone. The camera as well has been updated, with a new image sensor and optical stabilization technology. The storage as well has had a huge upgrade, with the standard storage now being 32 gigabyte up to a 256 gigabyte model.
Although these new features may be a nice boost and cause excitement amongst Apple fans, the bigger question lies with whether the new iPhone 7 model can reignite sales growth, both domestically and globally. For past 9 years, the iPhone has long been believed to be a great cash cow for Apple, and today makes up about 2/3 of their revenues. However, recently, Apple has been struggling with sales and turnover rates for their iPhone, with sales falling 23% during their previous quarter. The problem is two pronged, where on the one hand they are struggling to expand beyond their established target market, especially into international markets i.e. China. The reason has to do with a higher competition of firms releasing their own smartphone models that are able to attract target niches, that would have otherwise bought Apple. As well as larger competitors such as Samsung, releasing more attractive smart phones with better technological units. As well as the cultural attitudes are now shifting, with high performing smart phones becoming the new norm today. The second problem is the low turnover rate, that is affecting how often iPhone users replace their iPhones for new models. Where it used to on average 24 months, 2011, today it is on average 29.6 months. This has largely to do tho with U.S. carriers ( as well as those abroad), no longer subsidizing phone upgrades, therefore, customers will have to front at least $650 to replace their old iPhones.
Apple hopes that new technological upgrades, specifically the new headphone technology and camera upgrades, will attract not only new sales, but as well increase iPhone turnovers. Analysts are generally split, over whether the new improvements and Apple’s generally global expansion strategies will actually help the company over the coming months. With many believing that the new upgrades will infact attract more users, with the new upgrades changing the smartphone experience enough to increase sales growth. The new iPhone should be able to better compete as a premium product and attract more users. Additionally, Apple has recently taken steps for cost-reduction measures, specifically in the construction of the iPhone with contractors in China, to increase their margins and earnings. An recent article written by an I Know First analyst, explains why the new upgrades, will in fact spur sales growth for Apple. Others have a more negative outlook for Apple’s iPhone sales, explaining that the new upgrades at best will allow Apple to boost sales to last years sales, (if not a bit lower). The reason is due to Apple losing its flair as being an innovative and revolutionary company, and the new updates will not attract higher sales, from cost-benefit viewpoint. Many investors as well as are worried about whether the iPhone will well AAPL shares as well, since historically AAPL shares have risen significantly days before a new model release. However, that has not been the case this time.
Along with the new iPhone 7 release, Apple has as well released the new smart watch, Apple Watch Series 2, which as well has many upgrades including being fully waterproof to be able to swim with it.
Therefore, although Apple Inc. is experiencing sales slowdown with the iPhone, they have much potential to recapture and expand their market share, as they are still a value company with more products being released to diversify their product line. Only time will tell if this model will truly be ‘perfect’ and reignite their sales and cultural standpoint.
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